Moody’s Investors Service has affirmed Cape Town’s credit ratings. The long-term global scale rating is Ba3. The long-term national scale rating is Aa3.za. Moody’s upgraded the outlook from stable to positive. This reflects Cape Town’s strong and improving financial performance.
Rating Affirmation
Moody’s affirmed Cape Town’s long-term global scale rating at Ba3. The national scale rating is Aa3.za. These ratings highlight the city’s strong financial position.
Table: Cape Town’s Credit Ratings by Moody’s
| Rating Type | Rating |
|---|---|
| Long-term Global Scale | Ba3 |
| Long-term National Scale | Aa3.za |
Positive Outlook
Moody’s has upgraded the outlook from stable to positive. This indicates a possible rating upgrade in the future. The outlook reflects the city’s strong financial performance.
Table: Moody’s Outlook Upgrade
| Previous Outlook | Current Outlook |
|---|---|
| Stable | Positive |
Reasons for the Upgrade
Moody’s cited several reasons for the upgrade. The city’s financial performance has been consistently strong. There have been improvements in revenue collection. The city has a sound liquidity position. These factors contributed to the positive outlook.
Strong Financial Performance
Cape Town has demonstrated strong financial performance. The city has consistently met and exceeded its financial targets. This has led to the affirmation of its credit ratings.
Revenue Collection Improvements
The city has made significant improvements in revenue collection. This has strengthened its financial position. Improved revenue collection reduces reliance on debt.
Sound Liquidity Position
Cape Town has maintained a sound liquidity position. This means the city has sufficient cash flow to meet its financial obligations. A strong liquidity position is crucial for maintaining credit ratings.
Investment Program
The city’s investment program is substantial. Cape Town relies on debt to fund its investment projects. However, improved financial performance could reduce this reliance.
Table: Key Factors in Rating Upgrade
| Factor | Impact |
|---|---|
| Strong Financial Performance | Affirmation of credit ratings |
| Revenue Collection Improvements | Reduced reliance on debt |
| Sound Liquidity Position | Positive outlook upgrade |
Future Expectations
Moody’s expects Cape Town’s financial performance to further strengthen. This could happen over the next 12-18 months. The city may surpass baseline forecasts. Strong financial performance could lead to a rating upgrade.
Cape Town’s Financial Strategy
Cape Town’s financial strategy focuses on improving revenue collection. The city aims to consolidate its financial performance. This strategy will mitigate the reliance on debt for investments.
Table: Future Financial Expectations
| Time Frame | Expectation |
|---|---|
| Next 12-18 months | Further strengthening of finances |
| Long-term | Potential rating upgrade |
Conclusion
Cape Town’s credit ratings have been affirmed by Moody’s. The outlook has been upgraded to positive. This reflects the city’s strong financial performance. Improvements in revenue collection and a sound liquidity position were key factors. Cape Town’s future looks promising with potential for a rating upgrade.