30 July 2020

New rating provided by Standard and Poor’s (S&P)

Combined original

On July 29, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Octavia to 'A' from 'A+'. The outlook remains stable.

S&P adjusted their previous rating to reflect their “expectations that low margins compared with the high debt levels will constrain Octavia's financial position - Octavia's strong focus on its social mission typically leads to lower margins than those of peers”. S&P went onto comment that Octavia’s levels of capitalized repairs, together with additional pressures stemming from COVID-19's impact, were also a factor. S&P’s stable outlook reflects “high demand for social housing in its area of operation and control over arrears”.

Director of Finance, Lynsey Bradshaw commented on the latest rating: “Whilst it is disappointing news, it reflects our response to the challenges of delivering much-needed new social housing and the additional debt we have taken on to achieve this. Our gearing remains low and our liquidity position is strong, demonstrating the strength of our underlying asset-base.

 Octavia have a strong social mission and legacy, which we remain committed to. Operating only in London, we continue to offer genuinely affordable rents and we are committed to supporting our communities. In these challenging times, we feel this is more important than ever.

Our homes are in some of the most expensive parts of the capital, many of which are heritage properties, making them more expensive to maintain. However, resident safety is our top priority and we place great significance on the energy efficiency of our homes, both of which we are substantially investing in.

We recognise that our unique approach brings with it unique challenges, and we will continue to focusing on strengthening our financial position in the upcoming revision of our corporate strategy.

 Our Board has taken a prudent approach to funding our development programme, and in the coming months we will be reviewing our ambitions and priorities in view of the current uncertain times.”