Welsh housing association retains A credit rating | News

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Welsh housing association retains A credit rating

ClwydAlyn, which manages more than 6,000 homes across seven counties in North and Mid Wales, has had its ‘A’ credit rating affirmed.

The housing association retained its ‘A’ rating from business intelligence agency Standard and Poor’s (S&P) in recognition of its focus on traditional social housing activities and the supportive policy framework it benefits from in Wales. Its outlook was deemed to be ‘stable.’

S&P also affirmed its ‘A’ rating on ClwydAlyn’s previously issued £250m public bond.

S&P said ClwydAlyn’s outlook was stable because it benefited from a generous grant environment and more flexible rental regime compared with some English regions.

In addition, ClwydAlyn's "excellent asset quality and operational performance offset the weaker economic conditions in its region."

Last year ClwydAlyn launched a new corporate plan with a mission to beat poverty and address the significant shortfall of affordable and social housing across Wales. The landlord is investing in a variety of schemes to help address income, food and fuel poverty.

The report said the agency viewed ClwydAlyn’s management as having significant experience in the social housing sector, with a development strategy that is aligned to its capabilities.

The landlord will continue to focus on its development plan, which aims to deliver 1,500 homes by 2023, mainly for social rent and supported housing. ClwydAlyn has completed almost 500 homes so far and aims to deliver a further 1,000 over the next three years.

S&P also said the organisation benefited from strong link with the Welsh Government, which directly regulates the housing sector and issues grant funding directly.

Earlier this year the social landlord raised a further £25m of funding to accelerate its development programme. The company agreed a deferred drawdown on its retained bond with funding delivered in two tranches of £15m in 2021 and a further £10m in 2022 with interest rates of 2.8% and 2.9%. The investment is enabling the landlord to build around 400 new homes.

Paul McGrady, Executive Director of Resources at ClwydAlyn, said: “We are pleased to have retained our A rating during what has been an uncertain time for many in our industry due to the difficulties presented by the pandemic.

“The report underlines our strong financial position and the strong relationship we have with the Welsh Government, which will assist in our plans to deliver 1,500 much-needed homes by 2023.”