Debt cited for Hyprop downgrade
Ratings agency Moody's says Hyprop's strategy of using debt to fund offshore acquisitions is putting pressure on its balance sheet
Blue-chip mall owner Hyprop’s offshore acquisition strategy has come under fire, with Moody’s downgrading its credit rating citing excessive debt levels. On Wednesday, the ratings agency said Hyprop, which owns some of SA’s highest-rated malls — including Hyde Park Corner, Canal Walk, the Clearwater and Rosebank Malls, and The Glen — had undertaken too much debt since it first ventured into south eastern Europe in 2016. As a result Hyprop lost its investment grade status with the agency and gained a speculative grade rating in the short term. However, Hyprop has disputed how Moody’s chooses to measure the property company’s debt level, saying it believed that the ratings agency had overestimated it. Hyprop primarily uses debt to fund offshore transactions. Hyprop’s share price fell more than 5% after Moody’s downgraded the company’s credit rating from Baa3 to Ba1 with immediate effect. A Baa3 rating implies Hyprop had adequate capacity to meet its financial commitments, while Ba1 me...
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