The credit profile of Ekurhuleni Water Care Company (ERWAT) (B2 rating on review) reflects the company’s close financial and operational links with its support provider, the City of Ekurhuleni (B2 rating on review), which guaranteed 92% of ERWAT’s debt as of 30 June 2021, as well as its legal status as a public-sector entity. The placement of the rating on review reflects the uncertainty surrounding its support provider’s ability to withstand the deterioration in the operating environment driven by the structural economic weaknesses, as well the impact of the coronavirus pandemic, which is likely to constrain the city’s financial performance through lower revenue collection as a result of higher unemployment.
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