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Optivo credit rating upgraded following merger
Optivo has today had its credit rating boosted by ratings agency Moody’s.
The 44,000-home housing association, formed from the recent merger between Amicus Horizon and Viridian, was today confirmed as A1 rated, which represents an upgrade from the A2 status previously held by Amicus Horizon.
Moody’s said that Optivo’s outlook remained negative, however, reflecting risks in the housing association sector following the UK vote to leave the European Union, and pressures on public finances.
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As a result of the merger Optivo is now the parent company of Amicus Horizon Finance, the special purpose vehicle holding Amicus Horizon’s £150m bond issuance in 2012.
The A1 rating places Optivo alongside organisations such as Sanctuary, Southern and Midland Heart in the second highest bracket of its ratings portfolio. It is behind only top rated Bromford and Riverside.
Moody’s said that Optivo benefitted from Viridian’s historically low level of indebtedness, with the new entity expected to register 42% debt to assets at cost. It also said the new entity benefitted from a historic turnaround in Amicus Horizon’s profitability, with operating margins strengthening from 21% in 2013 to 29% in 2016.
