S&P welcomes MTVH’s corporate structure shake-up

Ratings agency S&P Global welcomed the change and affirmed its A- credit rating on MTVH, with a stable outlook. 

“We think this change will better reflect the importance of Metropolitan Housing within the MTVH group,” S&P said. “Metropolitan Housing holds the majority of the group’s housing stock and generates the vast majority of consolidated turnover.”

Metropolitan and Thames Valley have remained as separate entities with the regulator as both are still listed as registered providers. S&P said it expects this situation to be maintained. 

“This contributes to our view that TVHA’s [Thames Valley’s] mission and activities remain aligned with those of the group,” the agency added. 

S&P said: “Having been the parent of MTVH since the merger, retaining part of its trading name, and being fully integrated into the group, we think TVHA continues to constitute an integral part of the group.”

Like many large landlords, MTVH has been enduring a difficult period. In its last full year accounts, the G15 landlord reported an £80m deficit over fire safety costs and last October had its Fitch rating lowered due to “worsening financial leverage metrics”.

However, S&P said it expects MTVH’s key financial metrics to “stabilise” in the next two to three years. 

The agency said the group’s financial performance will still be hindered by its building safety costs. 

But it added: “We expect management to handle these costs prudently, having gained clarity on the scope of the required works, which has resulted in a clear execution strategy.

“We further expect MTVH’s development aspirations will remain contained to balance the investment needs in existing homes.”

MTVH currently has a G1/V2 rating with the regulator. It has yet to be assessed for consumer standards.