S&P upgrades Invitation Homes

S&P said it raised its issuer and issue ratings for Invitation Homes Inc. to BBB from BBB-.

“Invitation Homes' capital structure has improved over the past two years as the company focused on diversifying into unsecured debt and increasing its weighted-average maturity. As of year-end 2022, Invitation Homes' capital structure comprised $2.1 billion of secured debt and $5.8 billion of unsecured debt. Weighted-average maturity also improved to 5.6 years, assuming all extension options are exercised.

“During 2022, Invitation Homes voluntarily prepaid without penalty the outstanding balance of its IH 2018-1 securitization, after drawing the remaining $575 million available under its seven-year unsecured delayed-draw term loan that closed in June 2022,” the agency said in a press release.

However, S&P warned, “The regulatory environment for single-family residential landlords is evolving and could place pressure on fundamentals. Regulatory pressures primarily stem from the California market but are expected to take a more prominent focus as federal and local governments become more open to legislative changes that could make owning rental properties less profitable.”

The outlook is stable.

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