COJG01 COJ07 COJ08 COJ05 201907120016A
City of Johannesburg – Global Credit Rating Co. Rating Recent Developments
CITY OF JOHANNESBURG METROPOLITAN MUNICIPALITY
(a municipality as described in section 2 of the Local Government Municipal Systems Act, 2000, duly
established in terms of Notice No. 6766, promulgated in the Provincial Gazette Extraordinary of 1
October 2000 in terms of section 12(1) read with section 14(2) of the Local Government : Municipal
Structures Act, 1998, as amended)
Issuer Bond Code: BIJHB
Bond Code: COJ05
ISIN No: ZAG000054339
Bond Code: COJ07
ISIN No: ZAG000085044
Bond Code: COJ08
ISIN No: ZAG000137571
Bond Code: COJG01
ISIN No: ZAG000116708
Communication to Investors
GLOBAL CREDIT RATING CO. RATING RECENT DEVELOPMENTS
Global Credit Ratings Co. (GCR Ratings) has on the 11th July 2019 placed the City of Johannesburg’s
(CoJ) rating on negative outlook and affirmed the national scale ratings of AA (ZA), and A1+(ZA) in the
long term and short term respectively.
GCR Ratings has cited the following positives:
– CoJ’s strong profile is underpinned by its position as the centre of economic activity in South
Africa, housing numerous domestic and international businesses, which in turn have facilitated
more steady economic growth (on average). Nevertheless, the metro continues to grapple with
high incidences of unemployment and poverty, despite the generally high levels of service
– CoJ reports well diversified sources of income, with strong underlying growth in key income
sources such as water and sewage income and rates.
– Management processes remain sound as unqualified audit reports have been received over
the review period.
– CoJ has very strong access to capital and little maturity concentration, which mitigates against
the highly geared gearing position.
GCR Ratings has also alluded the persistent high gearing and weak liquidity in financial year 2018 as
a significant rating weakness.
In order to address the concerns raised by GCR the City has indeed seen significant improvement in
the liquidity level through the implementation of the following initiatives in the financial year 2019:
– Implementation of strict credit control processes
– Reduction of uncollectable debt
– Increase in the use of e-services
– Continuation of city wide verification of electricity and water meters.
Note holders are referred to GCR’s press release for any further information, available at
12 July 2019
Absa Bank Limited (acting through its Corporate and Investment Bank division)
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