29th March 2023 – Hexagon today announces that following a stability check and reactive engagement, the Regulator of Social Housing (RSH) has regraded our Governance grading to a compliant grading of G2 and has maintained our Viability grading at V2. The review can be found on the RSH site: https://www.gov.uk/government/publications/regulatory-judgement-hexagon-housing-association-limited/current-regulatory-judgement-hexagon-housing-association-limited-29-march-2023
Hexagon accepts the G2 compliant regrade, as we acknowledge the need for improvement and are already making changes within the organisation. A summary of these changes are outlined below.
- Hexagon self-referred its data quality issues on landlord health and safety, rents and repairs to the RSH and commenced the automation of key processes to help improve data quality.
- Hexagon has also made considerable progress in reducing a backlog of fire risk assessment safety works and electrical installation inspections. The remaining fire risk assessment works largely fall into the low-medium risk category.
- A new complaints investigation team has been appointed and trained to provide robust independent assessment of all complaints and response within published timeframes. We believe residents will see an improvement in complaints handling and first-time resolution in 2023.
- The Board has approved a new corporate strategy centered on core services to customers. Within the first two years of this plan, the priority will be to turn around under-performing services, update our systems, improve the scope and quality of our data, make better use of our assets, complete our committed development programme, and improve our overall financial health in the face of the serious challenges the whole sector is facing.
We will work closely with the regulator to keep our progress under review as we work towards a return to G1. Hexagon remains committed to investor engagement and transparency and, to the extent that you have any specific questions, please contact: Ali-Jarar Shah, Finance & IT Director, ajshah@hexagon.org.uk
24 March 2023 – S&P Global Ratings (S&P) issued a Ratings Update for Hexagon Housing Association Ltd (Hexagon), lowering its long-term issuer credit rating to ‘BBB+’ from ‘A-‘, outlook stable. At the same time, S&P lowered its long-term issue rating on Hexagon’s £250 million senior secured bond to ‘BBB+’ from ‘A-‘.
The economic conditions in which English social housing providers operate remain challenging and Hexagon is not immune to the UK’s high levels of inflation, elevated interest rates and difficulties in the construction sector. We note S&P’s observation that Hexagon is “likely to be able to contain costs relating to investments in existing stock and that development of new homes will be contained such that the group’s debt metrics will marginally improve toward the end of our three-year forecast period, while liquidity remains strong.”
We remain firmly committed to our existing and future tenants, the local community, and the environment. Our residents are at the heart of our business: our investment in existing assets is critical and remains a key objective of our corporate strategy.
In April 2022 we issued a £250m senior secured bond, due 2048, at a coupon of 3.625%. The transaction materially improved our interest rate and liquidity risk profiles. The S&P Global’s Research Update can be found here S&P Global – Rating at 24 March 2023
Hexagon remains committed to investor engagement and transparency and, to the extent that if you have any specific questions, please contact: Ali-Jarar Shah, Finance & IT Director – ajshah@hexagon.org.uk.
