Ratings remain secure despite legal problem
An influential credit rating agency has moved to calm investors after fears that deals with housing associations could be undermined by the gap in the Housing Corporation's constitution.
Standard and Poor's has announced that it will not change the ratings of housing associations after the discovery by the corporation of a legal flaw that stopped it from delegating decisions from its board to its officers (Inside Housing, 20 January).
The ratings agency, which assesses the credit worthiness of associations as a guide for bond investors, said it was awaiting a legal opinion from the corporation.
There had been fears that the legal problem would affect the ability to sell homes used as security on loans. But the ratings agency said it believed that investors would still be able to realise their security if necessary.
Standard and Poor's legal counsel Judith O'Driscoll said: 'Security over assets is effective.'
Emergency legislation will be introduced to allow the corporation to delegate board decisions to officers in future (Inside Housing, 17 February 2005).