Bromford Flagship LiveWest’s credit metrics to strengthen despite merger pressures, rating agencies say

The agency also said the “strong assessment of management remains underpinned by the group’s prudent approach to cost control and commitment to delivering efficiency across the organisation”.

S&P’s report stated: “We expect that the merged entity will leverage its additional capacity to develop more homes, but we believe that the impact on the debt metrics will be contained by efficient cost control, high levels of grants and a low average cost of debt relative to peers.”

Moody’s said that BFL’s size, as one of the UK’s largest housing associations, provides “a strong ability to absorb shocks and gives it a robust market position and strong political influence”.

Moody’s also said: “BFL has good buffers in the form of very strong margins, solid interest cover metrics and high liquidity. 

“Moreover, the organisation has a strong track record of cost control as demonstrated by the stability of its margins through the last five years despite rising spending pressures.”

Paul Walsh, chief finance officer at BFL, said the ratings demonstrate the agencies’ “continued confidence in BFL’s strategy, financial plans and credit profile”.

He added: “The credit ratings form an important part of our financial planning and are a key enabler to accessing the capital markets. 

“Given the size and scale of our combined organisation, the public and private debt capital markets are likely to play a significant role in our future funding arrangements, allowing us to continue investing in both existing and new homes and enabling even more people to thrive.”