Stichting's Heeren Loo Zorggroep rating affirmed at AA- as Fitch keeps stable outlook

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Heeren Loo rating affirmed

Highlights

Fitch affirmed Stichting's Heeren Loo Zorggroep's long-term IDRs at 'AA-' with a Stable Outlook, citing strong state support and an 84% revenue link to the Long-Term Care Act.
sHL plans over EUR700 million of investments in 2026-2030, including about EUR230 million in additional debt financing amid persistent sector staffing and cost pressures.
Liquidity reserves stood at EUR134 million at end-2025, with leverage at 0.7x and gross interest coverage at 14.4x as EBITDA declined to EUR80.7 million for 2025.

Rating rationale and support assessment

As reported by Fitch Ratings, Stichting's Heeren Loo Zorggroep's long-term foreign- and local-currency Issuer Default Ratings are affirmed at 'AA-' with a Stable Outlook. Fitch assesses the Netherlands-based care provider as a government-related entity, with a standalone credit profile of 'a+' and a support score of 22.5 out of 60, resulting in a one-notch uplift from that standalone assessment.

Fitch says support expectations are strong because disabled care is a core public service in the Netherlands and most of sHL's revenue is linked to the Long-Term Care Act. The agency notes that 84% of revenue comes from that framework, while the politically sensitive nature of care for vulnerable clients raises the incentive for authorities to maintain continuity of services.

The rating agency also says sHL is the country's largest intellectual disability care provider, which increases the potential public impact of any disruption. At the same time, Fitch does not view contagion risk as strong enough to affect broader government or healthcare financing, partly because the organization is not seen as part of the public system as a whole.

Investment plans, liquidity and sector pressures

sHL's standalone profile is supported by what Fitch describes as a high midrange risk profile and a financial profile in the 'a' category. The agency points to stable revenue characteristics, backed by essential services, long client relationships and predominantly public funding, even though contracts are negotiated annually.

Fitch says expenditure pressures remain significant as staffing costs account for almost 70% of operating expenses and the healthcare sector continues to face recruitment difficulties and high absenteeism. It expects those conditions to persist in the short term while sHL pursues more than EUR700 million of investment in 2026-2030, including about EUR230 million of additional debt financing in Fitch's rating case.

Liquidity remains a key strength in the assessment. At end-2025, sHL had EUR134 million in liquidity reserves, access to an undrawn EUR145 million credit facility and liquidity coverage of 13.2x, while more than half of its bank debt was guaranteed by Stichting Waarborgfonds voor de Zorgsector.

Fitch says EBITDA fell to EUR80.7 million in 2025 from EUR101.1 million in 2024 as one-off benefits normalized and personnel and other operating costs increased. Even so, debt declined to EUR192.7 million from EUR207.8 million, helping keep leverage at 0.7x, with debt service coverage at 3.9x and gross interest coverage at 14.4x.

Our earlier coverage of Fitch’s rating on Hainan Rubber’s proposed subordinated perpetual securities explained how the instrument’s subordinated rank and coupon-deferral features drove a rating two notches below the issuer level. We also highlighted Fitch’s view of state-related support, the group’s elevated leverage, and liquidity backstops that underpin its ability to refinance offshore debt.

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