Landlord secures rating to seek institutional funds
A housing association believes it can attract direct investment from pension funds and life insurance companies after securing a credit rating.
Saffron Housing Trust, a 4,800-home large scale voluntary transfer organisation, secured an AA3 rating from Moody’s yesterday. The rating, the fourth highest possible, means the agency considers Saffron to be a low credit risk. The trust believes it is the first LSVT to get a credit rating.
Adam Ronaldson, chief executive of SHT, which operates in south Norfolk, says the rating will allow the organisation more flexibility in its funding, by giving confidence to private investors.
He said: ‘This could help us with some of our funding requirements. We are in discussions with a couple of institutional investors about opportunities.’
Mr Ronaldson said the organisation is probably too small to do an own-name bond issue, so is instead speaking directly to institutions.
SHT is building 200 homes through the affordable homes programme after being allocated around £3 million of grant. SHT’s allocation was part of a £13.9 million allocation to a consortium involving SHT and four other associations.
Mr Ronaldson said SHT is hoping to attract more funding to build homes outside the programme. The organisation has around £80 million of borrowing facilities of which more than £70 million has been drawn down.
The rating will also provide a useful benchmark to allow SHT to improve its finances in the future, Mr Ronaldson added.
Michael Harrowven, chair of SHT, said: ‘The result of Moody’s assessment and the excellent rating will enable Saffron to be clearly recognised amongst its peers and positioned at the leading edge of social housing provision, delivering even greater value into our communities.’