22 April, 2005 Press Release Fitch Revises Joburg's Rating To Positive Fitch Ratings, the international rating agency, has today revised the City of Johannesburg Metropolitan Municipality's (COJ) National rating Outlook to Positive from Stable and upgraded the National Short-term rating to "F1(zaf)" from "F2(zaf)". At the same time the agency has affirmed the National Long-term rating at "A-(A minus)(zaf)". The new Outlook reflects Joburg's improved financial quality and financial position. Joburg's senior unsecured 2010 ZAR1 billion rand denominated bonds (COJ01) are affirmed at "A-(zaf)" and partially guaranteed 2016 ZAR1bn rand denominated bonds (COJ02) are affirmed at "AA-(zaf)". Mayoral Committee Member for Finance Strategy and Economic Development, Parks Tau said," Income streams have stabilized with indications of improved collection rates, our income levels have increased to an overall rate of 91% post financial year end compared to 85% in 2004". He added, " Joburg reported a net surplus before tax in 2004 of ZAR246.2 million, accounting for 2.3% of operating revenues, a vast improvement to the deficits recorded in previous years". The upgrade in the Short-term rating results from an improvement in liquidity and working capital management. Joburg's capital budget for 2005 projected nearly 63% being funded from its own sources and grants. " Our Long-term rating is supported by improved budgetary performance and planning because Council has taken a prudent approach by continuing to make provision for bad debt ", said Tau. He further said, " In addition improved operations led to the implementation of nearly 90% of the 2003/04 capital budget". Continuing he said that the medium term note program encompasses spending of ZAR2bn per annum, 50% being debt financed. Joburg's debt is expected to increase to approximately ZAR7bn over the next few years up from ZAR4.9bn in 2004 yet to stabilize at 45% of operating revenues. The recent bond issues have improved the debt profile of the City as expensive debt was re-financed, lessening interest charges. Tau said, " In an effort to finance its backlog capital investments, the City is considering the partial sale of its consumer debtors book amounting to ZAR2.5bn". Fitch regards the proposed sale as positive since proceeds can be used for capital expenditure without incurring additional debt. For more information contact William Mathamela on (011)242 1040. Ends | Virgil James | Spokesperson | Communications | Telephone:011 407 7226 | Facsimile:011 403 3494 | Cell:082 467 9415 | Email:virgilj@joburg.org.za