Fitch Credit Rating update

This week our credit rating agency, Fitch, in their annual review of Origin, made the decision to revise Origin’s credit rating down one notch, from A- (stable) to BBB+ (negative).

Fitch acknowledge the proposed partnership with Places for People, but at this point do not account for it in their decision.

Fitch Statement

“The downgrade reflects Fitch's view that the sustained high inflation rate will further compress Origin's margins over the coming years. Simultaneously, it will have to continue to sustain a large investment programme to meet the various regulatory requirements. This programme will have to be financed in a higher interest rate environment, further pressuring Origin's ratios.

Origin's downgrade and Negative Outlook reflect its financial performance. The potential recently-announced merger with Places for People Group Limited (A/Stable/F1+) is not accounted for in our rating case scenario. The merger is still under discussion between both parties, but if completed, Fitch believes it could help Origin address some of its current challenges”

The Full Press release can be found at https://www.fitchratings.com/site/pr/10250628

Origin Statement

'Whilst we are disappointed by the result, the current position reflects the growing pressure the sector has been facing due to higher operating costs driven by inflation, rising interest rates, and building safety investment requirements combined with constraints on revenue income, such as the rent cap for 23/24. Nevertheless, we have the flexibility to adjust our plans, with a long history of successful adaptation to changing operating contexts, and a strong asset base. In addition the prospect of partnership with Places for People would secure additional investment in our existing stock portfolio and increased financial capacity to continue our successful track record of building new homes’’

For more information contact communications@originhousing.org.uk