Rating agencies Moody’s and Standard & Poor’s have maintained their respective A2 and A+ assessments of Sovereign, meaning that the 58,000-home housing association retains its place as one of the highest rated in the sector.
Despite concerns around Brexit, Moody’s said the outlook for Sovereign remains stable, with ‘strong profitability, stable cash flows and strong financial management’ cited as positive aspects.
Standard & Poor’s outlook remains negative, with the potential impact of Brexit threatening a UK downgrade, though the report states that ‘Sovereign’s asset quality and operational performance remain very strong, supported by very low vacancy rates.’
Barry Nethercott, Sovereign’s Interim Chief Financial Officer, said: “Sovereign is a major business and an ambitious housing association. These solid foundations, recognised again by two major credit rating agencies, means we can deliver on our fundamental purpose, providing quality homes, better places, with great services.
“Sovereign has a track record of financial strength and, despite the challenges we and our residents are facing, we¹ll continue to work hard to use our business value to maximise the impact of everything we do.”
Sovereign operates in the south of England and is one of the largest affordable housing developers in England. Last year, nine out of ten new homes were available to rent below market levels or to buy through shared ownership.
A mark of its robust financial standing, Sovereign recently secured a ground-breaking £250m unsecured revolving credit facility, syndicated across five major lenders. This deal gave Sovereign the financial security and flexible access to finance needed to continue building through a potentially uncertain political and economic period.
The organisation plans to deliver nearly 2,000 homes a year through more land-led deals, alongside a strong focus on providing quality services and investing in the platforms needed to help the organisation evolve its connectivity and reach.
These ratings also follow Governance (G1) and Viability (V1) ratings – the highest scores available – awarded to Sovereign by the Regulator of Social Housing in April 2018, following an In-Depth Assessment.