'High leverage' Hyperion debt passes through £1bn barrier

Hyperion’s debt has passed through the £1bn barrier, with Moody’s listing a number of issues the insurance group faces.

Hyperion’s growing debt is now £1.142bn, as the latest tranche of debt, a £100m loan, was added.

Moody’s estimates the debt to earnings ratio is around 6.6x.

Moody’s highlighted  ”its strong diversification across geographic regions and business lines, very good EBITDA margins and a track record of robust organic growth.”

But the rating agency also flagged: ”In Moody’s view, these strengths are tempered by the group’s weak bottom line profitability, inherent risk associated with the Hyperion’s active acquisition strategy, significant financial leverage and rising outstanding financial debt obligations.”

Hyperion’s rating ”is constrained by the group’s high leverage profile and the agency’s expectation of ongoing material cash outflows related to past and future acquisitions,” Moody’s says.

Hyperion’s ability to honour its financial obligations is B2, described as ‘highly speculative’. This is known as non-investment grade, or junk territory. 

Chief executive David Howden says the firm is a well-differentiated, has a strong culture and is a fast growing business. He insists their view of the leverage is lower than the rating agencies.