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Clarion maintains A3 stable rating with Moody’s
Moody’s has upheld Clarion’s A3 stable credit rating after noting the association’s “strong debt management practices”.
The credit rating agency said the landlord, which owns 125,000 homes across the UK, benefits from an “ample unencumbered asset base”.
It comes after Moody’s upgraded the outlook for Clarion and 32 other housing associations last autumn from negative to stable.
This was maintained alongside its “prime” A3 score, as Moody’s noted “there is a strong likelihood that the government of the UK would intervene in the event [of] acute liquidity stress”.
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The report said Clarion had tempered its risk appetite, with a lowered target of adding 12,418 homes over the next five years.
It remains one of the largest housing associations in the UK, Moody’s added, operating across 170 local authorities and holding political influence.
However, the association’s development programme remained “sizeable”, with a shift towards greater reliance on market sales.
Clarion’s operating margin fell from 20% to 16% last year, the report added, as its costs rose.
But Moody’s said that the landlord had “demonstrated an ability to make efficiency savings in recent years”.
The association was given an E3 environmental score as a “significant proportion” of its homes require work to meet 2035 energy efficiency standards.
It was rated S3 for social risks, with rent rises capped below inflation, impacting on margins.
Clarion scored G2 for its governance, which was said to be “fit for purpose” and feature “strong financial management policies”.
A Clarion spokesperson said: “We are pleased to have retained our A3 / Stable rating from Moody’s.
“Its annual review recognised our robust debt management strategy underpinned by our diversified debt, strong capital market access and low refinancing risk.”
The news comes after Bromford revealed that it will no longer accept a credit rating update from an agency “unless they meet with our customers as part of the annual review process”.
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