Abri retains A3 credit rating from Moody’s ahead of Octavia merger

The ratings agency Moody’s has re-affirmed Abri group’s credit grade of A3 stable across all its entities ahead of its merger with Octavia.

Octavia, which manages around 5,000 homes, is currently non-compliant with the Regulator of Social Housing’s governance and financial viability standard because of its poor financial planning and unrealistic budgets.

As part of the merger, anticipated to complete later this month, all of its associated entities will all become subsidiaries of the 50,000-home Abri.

Moody’s said the rating reflected the fact that the “credit quality of the merged organisation largely mirrors that of Abri as a standalone entity, despite Octavia’s significantly weaker credit quality”.

“We expect that Abri has sufficient expertise to effectively integrate Octavia into its operations and address its financial and governance weaknesses,” it added.

It noted Abri’s track record of executing merges, having been formed out of the merger of Radian and Yarlington and merger with Silva in the 2024 fiscal year.

Moody’s rating follows Abri’s retention of G1 V1 rating from the Regulator of Social Housing at the end of last month.

Gary Orr, group chief executive at Abri said: “We’re pleased that the Regulator has reaffirmed Abri’s G1 V1 rating as a well-governed and financially sound organisation. 

>> Read more: Octavia and Abri merger step closer after shareholders’ approval 

“This, coupled with Moody’s A3 stable rating for the combined group, including Octavia, demonstrates Abri’s ongoing financial strength and financial resilience.

“These ratings show that Abri is well-placed to complete the successful delivery of its current five-year strategy in 2025 and to replace this with a new, long-term strategy aligned to its external operating environment and the government’s proposed national housing strategy.”