S&P Global Ratings lowered its foreign- and local-currency long-term issuer credit ratings on Thrive Homes Ltd. to A from A+. Thrive is the asset-holding parent of social housing group Thrive Homes.
The outlook is stable.
The rating agency also lowered its issue rating to A from A+ on the £125 million senior secured bond issued by Thrive Homes Finance PLC, the company's financing vehicle.
Thrive Homes Finance PLC was established for the express purpose of issuing bonds and lending the proceeds to Thrive, and the rating agency views it as a core unit of the Thrive Homes group.
The downgrade reflects S&P's view that Thrive's sturdier growth appetite indicates rising leverage and may lead to weaker liquidity as the development program is partially financed from cash reserves and new debt, weighing on the rating agency's evaluation of its financial profile.
The stable outlook mirrors S&P's belief that Thrive will manage risks connected with its development program and associated pressure on its leverage and liquidity while withstanding adverse impacts of U.K. welfare reform and universal credit on its processes and margins.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.
