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Moody's: Cosmopolitan report could improve credit ratings
The implementation of recommendations in a report on the Cosmopolitan crisis could improve housing association’s credit ratings, Moody’s has said.
The credit rating agency today said recommendations in the report by consultancy Altair into lessons learned ‘would be credit positive’ for English associations. The Altair report, commissioned by the Homes and Communities Agency, featured dozens of recommendations for the regulator, boards of associations and the government. The Department for Communities and Local Government confirmed this week it is reviewing legislation to make it easier for the regulator to intervene in a crisis.
Moody’s said the recommendations would benefit lenders by improving the regualtor’s daily moniotirng of housing associations and allowing crisis management through the appointment of a manager without an enforcement notice.
Roshana Arasaratnam, a senior analyst at Moody’s, said: ‘ “As housing associations continue to engage in non-core social housing activities and off-balance-sheet financing, the sector faces increasing risks.
‘The Homes and Communities Agency’s ability to intervene and implement necessary changes will continue to be an important credit driver.’
The Altair report called on the government to change legislation to allow the regulator to appoint a ‘special manager’ in a crisis without giving 28 days notice. It also recommended doubling the moratorium period – under which the HCA is given a chance to sell homes before lenders seized them- from 28 to 56 days.
