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Social Housing Provider and Association Scorecard (SHPA)

 

  • The Challenge
  • The Solution

Many countries are faced with the reality that approximately 1.6 billion people live in inadequate housing conditions. As such, investment in existing assets and developing affordable housing have increased. Social housing providers are now expected to capitalise on record-low interest rates and obtain external financing for projects. As a result, managing higher levels of debt, together with stable, predictable cash flows and strong liquidity positions have become crucial to maintaining creditworthiness.

Closely monitoring the credit quality with S&P Global Market Intelligence Social Housing Provider and Association Scorecard provides a valuable framework for assessing credit risk, using measures that can affect the likelihood of default.


Figure 1: Overview of the Scorecard Framework

Source: S&P Global Market Intelligence. Simplified version for illustrative purposes only.
*SACP = Stand-Alone Credit Profile

SHPA Scorecard Structure

The Scorecard provides a granular and transparent framework for assessing credit risk, using measures that can affect the likelihood of default. It includes 7 factors to derive the Stand-alone Credit Profile (SACP) for social housing providers and associations.

The factors are divided between the enterprise profile and financial profile.

Enterprise profile determined by:

• Industry risk
• Economic fundamentals
• Market dependencies
• Market position

Financial profile determined by:

• Financial performance
• Debt profile
• Liquidity
• Financial policies

Scorecard Features and Benefits

Features Benefits
Consolidated PD scoring for social housing providers and associations globally An effective framework that focuses on the key factors most predictive of default risk
Methodological transparency reveals the Scorecard’s framework, including the granular scoring criteria Annual validation and full technical documentation describes the analytical/statistical processes and data used in the Scorecard’s construction, helping to enhance the consistency and transparency of internal rating systems
Ability to factor in external support, for example government or group support, to fine-tune the final assessment Given the primary mission of these organizations, it is important to account for support in the overall assessment

Learn more about the SHPA Scorecard

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