S&P credit rating update
Ratings agency Standard & Poor’s (S&P) has today lowered Sovereign Network Group’s (SNG) credit rating from A+ to A and confirmed that the outlook remains negative.
The ratings agency said that SNG’s rating was being downgraded because of its commitment to continue to fund investment in new homes and in existing stock through debt “more than anticipated.”
A rating of “A” is defined as “Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances.” Today’s statement noted that SNG faced high-cost inflation and interest rates.
Peter Benz, Chief Financial Officer at SNG said:
“S&P’s rating of SNG at A with negative outlook recognises that against the very challenging external economic environment SNG remains a good investment with a strong ability to meet its financial commitment. The SNG Board remains committed to maintaining the organisation’s financial strength and will only commit to further exposure to development risk within the confines of its proven investment parameters.
“SNG has very low levels of unsold stock with its expanded geography providing a natural risk hedge against localised housing market movements. SNG’s business plan shows, notwithstanding short term pressures, substantial improvement in financial metrics over the medium term and flexibility to retain strong credit quality in the event of deteriorating macroeconomic conditions.”