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Two landlords handed stable outlook by S&P
Ratings agency S&P has affirmed stable outlooks for two social landlords.
Large housing association BPHA saw its long-term credit rating reaffirmed at A+ with a stable outlook. At the same time, Essex-based landlord CHP had its stable A- credit rating confirmed.
BPHA said the result recognised “that against the very challenging external economic environment during the past year, BPHA has maintained its core financial strength and very strong liquidity”.
“This strong rating will ensure that BPHA can continue to access additional funding in the markets to support the building of much needed new affordable homes,” it said.
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S&P highlighted the landlord’s “extensive experience of management” in the sector and the flexibility in its financial plans for investment in existing and new homes, BPHA said.
The ratings agency also commended the “modest investment requirement in existing homes” due to the quality of its assets, which it said was “viewed as more favourable than sector peers”.
BPHA has a G1/V1 rating for governance and financial viability from the English regulator.
It reported a net loss before tax of £1.5m in its most recent annual accounts due to £22.7m in exceptional breakage costs from legacy financial agreements.
CHP said it is two years into its current corporate strategy, which aims to use partnerships with M&G and Legal & General Affordable Homes to slow the pace of growth on its balance sheet and improve its metrics for debt and interest cover.
Paul Edwards, chief executive at CHP, said this approach means the landlord is “well placed to continue providing great homes and services” for its customers.
The affirmed rating “supports our plans to push forward with our current strategy and acknowledges the progress we’ve made over the last 12 months despite a tough economic environment”, Mr Edwards added.
CHP had its outlook revised by S&P to stable in October 2023 after it disposed of shared ownership assets. It is rated G1/V2 for governance and financial viability by the Regulator of Social Housing.
Last month, CHP’s annual accounts revealed it had improved its operating margin by eight percentage points to 33.8% in 2023-24 after selling shared ownership homes to M&G.
Last week, major London landlords L&Q and Hyde saw their credit ratings downgraded by Fitch Ratings over their declining financial leverage metrics.
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