Standard & Poor's Ratings Services said it revised its revised methodology and assumptions for assigning stand-alone credit profiles (SACP) to social or public housing providers, the first stage in assigning issuer credit ratings (ICRs) to these entities.
Because these providers perform a public service and are instrumental in meeting government housing goals, the agency said it applies its criteria for government-related entities to arrive at the final ICR, and may also apply our group methodology criteria where appropriate.
The criteria assign SACPs to social housing providers using a framework that considers the enterprise profile and financial profile of the entity. Industry risk, economic fundamentals and market dependencies, and market position determine the enterprise profile. Financial performance, debt profile, liquidity, and financial policies inform the financial profile assessment.
They apply to ratings on public and social housing providers globally that primarily fulfill public service missions, rather than seeking to maximize profit, and where any surpluses are reinvested or distributed for public service purposes. Examples of these entities include public housing authorities in the U.S., public housing providers in Sweden, and social housing providers in the U.K. and Netherlands.
The criteria do not apply to for-profit entities or associated groups of entities without a public service mission, even if they operate in affordable or social housing markets.
The revised criteria will lead to few rating changes, S&P said, and any changes should be within one notch of the existing rating. These criteria are effective immediately for all new and outstanding social housing provider ratings. S&P plans to review all outstanding ratings within six months of the date of publication.
