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Octavia given A+ rating ahead of £100m bond issue
Ratings agency Standards and Poor’s (S&P) has awarded an A+ rating with stable outlook to London-based housing association Octavia Housing.
The agency said the 5,000-home association had displayed “solid economic fundamentals and robust asset quality”, although the rating was constrained by “above-average maintenance costs”.
The agency added: “We think Octavia has a very strong enterprise risk profile. We perceive the UK social housing industry to be low risk, predominantly due to its anti-cyclical nature and strong oversight from the Regulator of Social Housing.”
The rating comes ahead of a planned £100m bond issue later this year, partly to fund a development pipeline of 1,000 homes over the next five years.
Octavia’s current debt stands at around £190m, with undrawn credit lines of £47m.
The association is understood to be renegotiating part of its loan book as some loans are constraining development plans because of their covenants.
S&P added: “We view Octavia’s financial policies as generally prudent. We observe very high transparency and robust liquidity policies. We note positively the coverage of all committed and pipeline development with cash in hand and secured liquidity lines to avoid reliance on sales receipts, which can be hard to predict in the short term.”
