Moody's rates Hyperion loans B1

Moody's Investors Service said it affirmed the B2 corporate family rating and B3-PD probability of default rating of Hyperion Insurance Group Ltd. and assigned B1 (LGD3) ratings to its proposed $725 million senior secured term loan and £85 million senior secured revolving credit facility. The outlook is stable.

The affirmation of the ratings follows the announcement of the proposed merger between Hyperion and RK Harrison Holdings Ltd. Under the terms of the agreement, Hyperion will acquire 100% of the share capital of RK Harrison and expects to fund the acquisition with a combination of debt and equity.

The rating affirmation reflects Moody's view that the merger is credit positive for Hyperion's business profile and business diversification.

Conversely, the group's financial obligations will increase significantly in absolute terms, the agency said, and profitability will continue to be constrained by material interest and integration costs, at least in the short term.

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