S&P rates RHP Finance bonds AA

Standard & Poor’s said it assigned an AA rating to the proposed senior secured bonds to be issued by RHP Finance plc, a fully owned subsidiary of Richmond Housing Partnership Ltd.

The subsidiary was established with the sole purpose of originating and providing funding to its parent and other subsidiaries of the group, S&P said.

The rating on the proposed bond reflects the AA issuer credit rating on Richmond Housing, which will be the sole borrower under the transaction and guarantees the payments on the bonds, the agency said.

The proceeds will be used to refinance existing debt and partially fund the development of 500 submarket rented properties over the next five years, S&P said.

The ratings reflect the moderately high likelihood that the United Kingdom government would provide timely and sufficient extraordinary support to RHP in the event of financial distress, the agency said.

The company plays an important role for the government and its public policy mandate, S&P said.

Rating constraints include exposure to the government’s decisions on the sector, particularly relating to changes in the payment of housing benefit and other welfare reforms, the agency said.

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