Credit worthiness

Standard & Poor’s Credit Rating

On 11 July 2018, S&P affirmed A+ rating and revised the credit outlook from stable to negative.

Standard & Poor remarked:

“We continue to view H&C's enterprise profile as very strong, supported by low industry risk, high demand for its stock, and a solid strategy. The outlook revision reflects our view that H&C's financial profile is at risk of deteriorating over the next two-to-three years, predominantly due to a planned increase in first-tranche and outright sales”.

“We continue to view H&C's strategy as a risk-averse one that remains focused on the tenure types the association specializes in. In addition, the experienced management team remains a credit-positive factor for the group, in our view.”

Find out more about S&P credit opinion with the document at the bottom of the page.

S&P’s Credit Rating – October 2017

On 25 October 2017, S&P issued A+ rating to Housing & Care 21 with stable outlook and assigned an A+ rating to Housing & Care 21’s proposed issuance of £250m senior secured bonds with a stable outlook.

Standard & Poor’s commented:

“HC's very strong enterprise profile is its key rating strength. It reflects solid economic fundamentals due to HC's older tenant base and strong market position. We see HC's financial profile as strong, underpinned by our expectation of its very robust liquidity position following the bond issuance.”

“In our view, the retirement and extra care segments carry low risk globally given their low cyclicality, high demand, and government support.”

“Overall, we believe that HC's strategy aligns with the market conditions in which it operates and we view positively that management is addressing the negative impact of welfare reforms. We view HC's overall financial management as well-balanced, supported by a stable and experienced senior management team.”

Downside scenario

"We could lower the rating on HC if we saw a deterioration in its financial performance with adjusted EBITDA margins falling structurally below 20% between FY2018 and FY2020. Weaker financial performance coupled with an increased exposure to high-risk non-traditional activities, such as outright sales, could deteriorate the quality of earnings and expose HC more to the volatility that is associated with market-related revenue streams".

Upside scenario

"We could raise our rating on HC if we saw a significant improvement in its financial performance and quality of earnings, such that EBITDA improved structurally above 30% and if, at the same time, we saw a marked improvement in its internal liquidity position to above 3x".

Find out more about S&P credit opinion with the document at the bottom of the page.

The Regulator of Social Housing (RoSH) Judgements

RoSH rating – December 2016

The Regulator of Social Housing (RoSH) affirmed Housing & Care 21’s top regulatory grading.

Governance Rating – G1 – means the provider meets the regulator’s governance standards

Viability Rating – V1 – means the provider meets the regulators’ viability standards and has the financial capacity to deal with a wide range of adverse scenarios.

RoSH rating - May 2015

The Regulator of Social Housing (RoSH) awarded top regulatory grading to Housing & Care 21 in May 2015.

  • Governance Rating – G1
  • Viability Rating – V1
  • Housing 21 S&P Credit rating October 2017 PDF 273.2KB
  • Housing 21 S&P Credit Rating July 2018 PDF 281.7KB
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