In March 2026, Fitch assigned a rating of BBB+ with a Stable Outlook to Belong Limited, a Charitable Care Home operator.
Belong is headquartered in Nantwich and over the last 20 years has focused on building a
portfolio of Care villages in the North West of England delivering innovative high quality
“person centred” care to older people, with a particular emphasis on dementia.
There are currently 8 villages, soon to be 9, situated in convenient town centre locations,
made up of a mix of Apartments and Households built around a central service hub and
supported by Belong at Home, providing care into the local community.
Belong enjoys exceptionally strong CQC and customer approval ratings and benefits from
high occupancy levels of 93%+. At the same time, its development programme has left it with
significant levels of debt with leverage over the last 5 years of between 8 – 10x EBITDA once
lease payments are taken into account.
This is high for banks, who generally limit lending to “for profit” operators at 5- 6.5x debt to
EBITDA. However, this view of leverage is not shared by Fitch or indeed other Rating
Agencies, who adopt a rather different approach to analysing the credit of Charitable Care
Home operators.
In contrast to “for profit” operators, this approach is built on the role of charities as essential
service providers, focused on delivering impact rather than simply maximising profit. While
sustainability of the business model is a factor, this is judged within the context of its quality
and importance for the community.
This allows Charitable Care Home Operators to sustain higher levels of borrowing when
delivering on their mission, hence a rating of BBB+ for Belong when the metrics for a “for
profit” care home operator would suggest a significantly weaker outcome.
So how can Charitable Care Home operators take advantage of this?
Charitable Care Home operators are primarily driven by a need to deliver on their mission
within a sustainable business model. As a result, they tend to provide a higher quality of care,
delivered in a more attractive and sensitive environment. In consequence they benefit from
strong brand awareness and local support while levels of occupancy tend to be higher.
Yet investment by Charitable Care Home operators has struggled to keep pace with demand,
and they currently constitute less than 15% of total bed places. Concerns from trustees over
appropriate levels of debt and the risks imposed by covenants has deterred investment in
new facilities, while the short-term impact on profitability of opening new homes acts as a
further disincentive.
If the view taken by the rating agencies is correct this may represent an overly conservative
approach to investment which risks under-delivery on their charitable mission.
The situation is not helped by the metrics generally adopted by the High Street banks which
reflect the ratios used for “for Profit” operators. However, this is where the impact of the
credit ratings becomes important – as good ratings will undoubtably effect lending appetite
and pricing.
They can also become an important influence on future investment decisions – providing
trustees with a dependable and objective framework for future decision making.
So where to go with this?
The more accommodating credit rating methodology provides Charitable Care Home
operators with a significant competitive advantage in the debt market. This can be used by
management and the board when taking decisions on the future development of the
business and will impact the cost, access and type of funding available to the operation.
Despite rumours to the contrary, the process is relatively straightforward and reasonably
predictable. Allia C&C can provide “Shadow Ratings” which are likely to give a good indication
of likely outcomes and can be incorporated into the planning process.
For those looking to go further, ratings for Charitable Care Home operators are not
particularly expensive or time consuming (unlike their commercial counterparties) while they
can be kept private for use in decision making or limited to specific funders when there is
benefit from doing so.
The approach taken by the rating agencies provides Charitable Care Home operators with a
significant competitive advantage which they can use to expand their reach and increase
social impact. Clearly this can only be used if there are sustainable opportunities to grow
their operations, but it explains the desire of developers to engage with charitable care home
operators on new developments and lessees to enter into 35 year commitments with them.
