You are viewing 1 of your 1 free articles
North East-based housing association gets A+ credit rating
One of the largest housing associations in the North East has received an A+ credit rating from ratings agency Standard & Poor’s (S&P).
Karbon Homes, which was formed in April last year through a merger between Isos Housing, its group partner Cestria Community Housing Association and Derwentside Homes, received the A+ rating with a negative outlook.
S&P said it forecasts that Karbon will keep its margins on earnings before interest, tax, depreciation and amortisation relatively stable at 28% in the next two years.
It added that it expects the 26,000-home housing association to “maintain a very strong liquidity position and debt profile” in that time.
READ MORE
Karbon received a negative outlook, S&P said, because of the agency’s general outlook on the UK. If, as it has done before over Brexit, the agency were to downgrade the UK’s sovereign rating, this would have an impact on housing association ratings.
Mark Reid, executive director of resources at Karbon Homes, said: “We have been working on our future financing strategy and are currently considering a number of possible funding routes to support our ambitious five-year business strategy.
“Our strategy focuses on delivering excellent customer service, providing as many good quality homes as we can, and shaping strong and sustainable places.”
The association is one of the three largest social housing providers in the North East. After it was formed by the initial merger, York Housing joined as an independent member in December 2017.
In May 2018 it bought 1,300 homes from another housing association, The Guinness Partnership.
Following the merger, it has focused on the development of 500 homes a year, which is mostly social housing but will build an increasing number of homes for private sale in the lead up to 2021.
In its judgement, S&P added: “Underpinning the rating is our forecast that exposure to sales activities will grow only gradually and likely remain below 15% of revenues.
“We consider that Karbon Homes’ financial management will mitigate the company’s vulnerability to the effects of national welfare reforms and changes.”
Update: at 10.56 on 7.11.18 This story was updated to include a comment from Karbon.
