THFC’s credit rating upgraded to A+ stable by S&P
The Housing Finance Corporation (THFC) has seen its credit rating upgraded to A+ with a stable outlook following an annual review by S&P Global.
The upgrade from A to A+ applies to THFC Group, THFC Sustainable Finance, and THFC’s three funding vehicles, T.H.F.C Funding No. 1, T.H.F.C Funding No. 2 and T.H.F.C Funding No. 3.
It sends a positive message to the wider UK social housing sector, given THFC’s position as the UK’s leading affordable housing aggregator, with around £8bn of lending to around 160 housing associations in England, Wales, Northern Ireland and Scotland.
S&P said the stable outlook reflected its expectation that THFC’s position as the UK’s leading social housing aggregator and its low-risk environment will offset pressure coming from strong competition, such as banks and own-name placements by social housing providers.
S&P also commended THFC’s prudent risk management policies, diversified pool of borrowers, and robust funding and liquidity ratios.
The upgrade follows a decision by S&P to review its approach to organisations it categorises as Public Sector Funding Agencies (PSFA methodology), where it is more closely linking the analysis of PSFAs to the credit risks of the underlying sector.
Overall, S&P said there is a low level of risk associated with THFC’s lending portfolio, supported by sovereign guarantees against more than 40% of its loan book.
Priya Nair, CEO at THFC, said: “ This rating upgrade is strong evidence that, despite the challenges housing associations face, the sector continues to be seen as financially robust. Having recently achieved the strongest set of financial results in THFC’s 37-year history, it’s encouraging to receive external validation for our strength and stability at a time when all eyes are on funding solutions and partners that can support the sector’s priority of investing in good quality existing and new homes.”
This S&P upgrade comes as bLEND Funding plc (bLEND), a wholly owned subsidiary of THFC, maintained its stable long-term A2 credit rating from Moody’s.
Moody’s said bLEND’s credit quality was a result of strong management of its pool of 32 housing association borrowers, along with the strong credit quality of the HAs and the liquidity feature that the bLEND platform offers.
Ms Nair added: “The UK social housing sector continues to navigate a significant period of change and competing pressures.
“However, the new government has offered some positive policy changes for social housing, and we at THFC and bLEND stand ready to provide the support and type of debt funding the sector needs to build and improve homes and help create sustainable communities across the UK.”
The updated S&P credit opinion can be downloaded here, and the Moody’s credit opinion can be downloaded here.
Notes to editors:
About THFC: THFC has been the UK’s leading affordable housing aggregator for more than three decades, providing innovative funding solutions for over 150 housing associations across all four nations of the UK. THFC has amassed a near £8bn loan book to date and continues to expand its range of financial products to serve the needs of the social housing sector. THFC has made significant contributions toward solving the UK’s affordable housing crisis, having funded 32,000+ homes under Affordable Housing Finance Plc, which oversaw the government’s initial Affordable Housing Guarantee Scheme. The aggregator launched bLEND in 2018 and unveiled THFC Sustainable Finance (TSF), a sustainable finance vehicle, in 2023.
To view THFC’s 2023/24 Annual Report and Financial Statements, click here.
For further information contact:
Will Stevenson, Group Treasurer – Will.Stevenson@thfcorp.com