Invitation Homes upgraded to BBB credit rating due to strong operating performance
Invitation Homes Inc. (NYSE: INVH) has been upgraded to a BBB credit rating by S&P Global Ratings, in recognition of its positive operating performance and improved capital structure. The single-family home rental REIT has diversified into unsecured debt and extended its weighted-average maturity to 5.6 years, standing at $5.8B at the end of 2022.
The enhanced capital structure was achieved through the company’s access to various unsecured financing channels that allowed it to refinance more than $3B of secured debt in 2021 and 2022, while extending its nearest-term final debt maturity to 2026. Jon Olsen, Executive Vice President of Corporate Strategy & Finance at Invitation Homes, emphasised the efforts to strengthen the company’s balance sheet in a statement.
While interest rate risk persists, existing interest rate swaps and improved weighted-average maturity have made these risks manageable despite the current expensive lending backdrop. Moreover, INVH has set prospects for more growth, as it manages costs and expands in a debt leverage-neutral manner.
Evercore downgraded INVH to In Line in February after the company posted Q4 results with higher-than-expected bad debt and expenses and lower-than-expected growth in rents. However, S&P Global believes that Invitation Homes has since worked on its shortcomings and is confident that it can maintain its positive operating performance.
In conclusion, S&P Global Ratings’ latest upgrade of Invitation Homes’ credit rating reflects the company’s improved financial standing and prospects for positive growth. INVH’s diversified portfolio and long-term financial strategy mark it as a REIT worth watching in the rental property market.#Invitation #Homes #credit #rating #boosted #Global #due #capital #structure