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‘Stable’ credit rating retained by large Midlands-based housing association
S&P Global has reaffirmed Bromford’s A+ rating, thanks to the social housing provider’s “prudent cost management” and flexible plans, according to a report by the credit rating agency.
The landlord also retained its A2 rating from Moody’s.
The announcement comes after the housing association, which provides more than 47,000 homes across the Midlands and South West of England, announced merger plans with Flagship Group last month.
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Imran Mubeen, director of treasury at Bromford, said: “We’re delighted that S&P has recognised our performance over the past year by reaffirming our A+ rating with a stable outlook.
“The A+ stable rating is also testimony to the opportunity and capacity we can create through the proposed merger with Flagship, with £5bn of new funding over the next 15 years delivering over 30,000 new, affordable, energy-efficient homes perfectly curated within our existing financial framework and A+ rating envelope.
“We arrive here by design and through intent, with a full shadow credit analysis run on every iteration of the business plan we produce.
“This is particularly important at a time when we are seeing continued pressure in our sector and a migration to the weaker single A or BBB.”
The Bromford-Flagship merger is not likely to take place until spring next year, with rent and service charge costs confirmed not to change.
Mr Mubeen’s comments came in a LinkedIn post published this morning, where he also thanked Bromford’s tenants who talked to S&P personally. The housing association announced this requirement earlier this year when it updated its policy on accepting annual credit ratings.
The S&P report pointed to the social landlord’s “favourable cost of debt” as a driving factor behind the stable outlook.
It also referenced the “strong demand for Bromford’s properties and management’s sound practices” as reasons to offset sectoral challenges caused by mounting building costs and investment pressures.
Bromford would need to improve key financial indicators beyond expectations, such as strengthening its market position via building on its property portfolio, to positively impact its rating further, the agency said.
Inside Housing listed Bromford as delivering the most social rent homes in 2023-24 in the Biggest Builders Survey.
S&P recognised the Flagship merger in its assessment, stating that the social landlord’s “strong financial indicators would mitigate pressure of the potential business combination… we do not expect it to have an immediate impact on our rating on Bromford”.
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