S&P cuts Service Properties

S&P said it downgraded Service Properties Trust to BB from BB+ and its senior unsecured notes to BB+ from BBB-. The 2 recovery rating is unchanged.

“The downgrade reflects our expectation even considering a modest economic recovery in the second half of 2020, SVC's key credit metrics will likely rise meaningfully over the next year given delayed asset sales and material EBITDA deterioration in its lodging segment. We expect S&P Global Ratings-adjusted debt to EBITDA will increase from 7.1x as of March 31, 2020 to above 10x by year-end 2020 then improve to around 8x by year-end 2021,” S&P said in a press release.

The outlook is negative.

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