Moody’s cuts Ekurhuleni, Tshwane, Erwat

Moody’s Investors Service said it downgraded the ratings of the city of Tshwane, the city of Ekurhuleni and the Ekurhuleni Water Care Co. (Erwat).

“Today’s actions reflect the marked weakening in the three entities’ credit profiles that Moody’s expects to persist over the medium term. The coronavirus shock has significantly dampened revenue and reduced cash buffers, raising liquidity risks,” Moody’s said in a press release.

Moody’s downgraded Ekurhuleni’s long-term global scale issuer rating to Ba3 from Ba1 and maintained a negative outlook. Moody’s downgraded the long-term national scale issuer rating to A2.za from Aa1.za.

The agency cut by two notches Ekurhuleni’s senior unsecured medium-term note long-term global scale debt rating to (P)Ba3 from (P)Ba1. Moody’s downgraded the senior unsecured MTN long-term national scale debt rating to A2.za from Aa1.za. The agency also downgraded Ekurhuleni’s senior unsecured long-term global scale debt rating to Ba3 from Ba1. Moody’s lowered the senior unsecured long-term national scale debt rating to A2.za from Aa1.za.

Moody’s trimmed by two notches Erwat’s long-term global scale issuer rating to B1 from Ba2. Moody’s also downgraded the long-term national scale issuer rating to Baa1.za from Aa3.za.

Finally, Moody’s lowered Tshwane’s long-term issuer GSR to Ba2 from Ba1 and downgraded the long-term issuer NSR to Aa3.za from Aa2.za.

For all three issuers, the outlook remains negative.

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