Shaftesbury already had a good rating of "A-minus stable" from Moody's rival Standard & Poors. Shaftesbury's finance director, Colin Adams, said: "The reason we have [two ratings] is to allow us to access a wider range of funding such as bonds. We also hope it will allow other public bodies to assess our performance when bidding for contracts such as private finance initiative care homes."
Moody's had expressed concerns about Shaftesbury's £4m rent arrears, but Adams said the aim was to reduce this figure to £3m by the end of the financial year.
Shaftesbury is exploring the option of releasing a bond, although nothing has been agreed yet.
The social housing sector is new ground for credit rating agencies. In other sectors, where credit ratings are more common, it is usual for businesses to receive ratings from at least two agencies – normally S&P and Moody's. Elisabeth Rudman, senior analyst at Moody's, said: "Potential investors find it useful to see both – they are used to it. Also, when bonds are going to be issued, it is normal for two ratings to be given."
Two credit ratings will allow us to access a wider range of funding, such as bonds
Colin Adams, finance director, Shaftesbury Housing Association
Rudman said she hoped Shaftesbury's public rating would encourage the dozen RSLs that have kept their ratings secret to go public, as ratings are a useful way of explaining businesses. This would be especially useful since so many RSLs have diversified into non-traditional areas such as key-worker and student housing.
Broomleigh Housing Association is the only other RSL that has gone public with its rating from S&P of "A-minus stable".
If the credit-rating trend gathers pace in social housing, RSLs will find it easier to attract large institutional investors. This would free them from relying solely on debt financing, presently the case for much of the sector.
Source
Housing Today
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