Housing association’s credit rating upgraded by Moody’s

This includes an an above average operating margin – the percentage of income left after day-to-day costs – of 46% against a median of 31% among other organisations with an A3 grade.

Moody’s did note that the landlord – based across Essex and Hertfordshire in the South East of England – is “moderately weaker” than other A3 rated organisation in terms of cash flow volatility due to plans to increase its development programme – although this is expected to improve over the next few years.

It said the organisation was expected to improve its debt to income position, as increased development led to more income and more assets on its books.

The housing association’s development programme of approximately 500 units through to April 2022 is mostly to be for affordable rent and shared ownership, with a small amount of outright sales (47 units, developed through joint ventures with commercial developers).

The organisation has two long-term bonds, two revolving credit facilities with banks and no exposure to derivatives, Moody’s said.

Moody’s provides ratings to around 40 housing associations, with A1 the top grading given in the sector to associations including Bromford and Riverside.

A handful of associations are rated A2 and the majority of its portfolio have an A3 grade, with a smaller number receiving the lower grading of Baa1 and Baa2.

Moody’s downgraded the entire sector by one notch in September last year due to concerns about Brexit.

Joe Chambers, chief executive of B3 Living, said: “Value for money has been our biggest driver and has been present in all our work since the government’s 2015 summer budget. The new rating will help B3Living boost and increase our development programme and help to continue investment in our existing homes. We hope that by continuing to improve our financial management our rating will grow even stronger in the coming years.”