Moody's upgrades Places for People

Moody's Investors Service said it upgraded Places for People Homes Ltd.'s issuer rating to A3 from Baa1, upgraded the long-term debt ratings of Places for People Capital Markets plc and Places for People Treasury plc to A3 from Baa1 and maintained the stable outlooks. The agency affirmed the A2 rating on the backed senior secured debt.

The upgrade to Places for People's ratings reflect the organization's shift in strategy which will result in a reduction in riskier and less profitable non-core activities, management's focus on improving the group's profitability which will boost interest cover ratios, and its very strong liquidity position.

Places for People will keep its opportunistic strategy and diverse revenues compared with rated peers. However, the group reduced its non-core activities in the current business plan compared with the previous business plan. Places for People's social housing lettings accounted for only 42% of turnover in fiscal 2019 compared to a rated peer median of 78% (fiscal 2019). Over the next three years, this percentage will increase gradually to 44% compared to last year's business plan which forecasted a decrease to a low of 33%. Included in the reduced non-core activities is a lower exposure to market sales, with an expected peak exposure of 28% of turnover in the current business plan compared to last year's forecasted peak of 38%, Moody’s said.

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