Silva has had its credit rating of A+, with a stable outlook, confirmed by prestigious credit rating provider S&P Global. This strong grade reflects our financial stability, management strength and successful development strategy, despite the turbulence of the current economic climate, caused by Covid-19.
This rating maintains Silva’s place in the second-highest tier of social landlords ranked by S&P, alongside much larger associations such as Bromford and Sanctuary. The ‘stable’ outlook means that the rating is unlikely to be downgraded in the future. S&P’s confident rating signals that Silva is continuing towards long-term financial success, which will enable us to build and maintain more homes and improve the lives of more people in the South East. The A+ rating was based on a set of criteria which assessed the full breadth of our financial activities. Areas considered by S&P included: our development plans for more new homes, the annual revenue generated by different areas of the business, our ample cash and our overall financial strategy and management.
John Andrew, Silva’s executive director (finance & procurement), commented: “Confirmation of our A+ credit rating is testament to the hard work that our teams have put into maintaining our financial strength and viability which will allow us to build the affordable homes that are desperately needed across our region, while improving the quality of our existing homes and the services we provide to our customers. We have maintained our core services during the lockdown imposed to deal with Covid-19 and expect to minimise the financial impacts on our business. This rating by S&P proves that our strategy of investing today for a secure tomorrow is working.”
In their report, which was published on 25 June, S&P explained that Silva’s financial credit rating reflected an expectation that long-term profit margins will improve once the initial impacts of Covid-19 have been overcome and stated that we were “quick to respond” to the pandemic. This was because site visits were replaced with phone calls and colleagues began working remotely before the lockdown had been announced. Although gross rental arrears have increased slightly compared to their historical three-year average, they remain favourable compared to other housing associations.
In March, Silva obtained £25m of new long-term loan funding through a private investment arranged by The Housing Finance Corporation at an interest rate of just 2.26%. We will use the funds to continue to invest in new homes while improving our existing homes and implementing new technology (as part of our Silva Transformation Programme 2021), which will improve our services while helping to reduce our operating costs.