S&P lifts FelCor notes to B+

Standard & Poor's said it revised the recovery rating on FelCor Lodging LP's 10% senior notes due 2014 to 1, indicating 90% to 100% expected recovery in default, from 3, which indicates 50% to 70% expected default recovery.

This resulted in the raising of the rating on the notes to B+ from B-. The rating also was removed from CreditWatch, where it was placed with positive implications in December.

FelCor Lodging is a subsidiary of FelCor Lodging Trust Inc.

The upgrade reflects the closing of the company's $525 million 5 5/8% senior secured notes due 2023 and the use of proceeds to repay $258 million of the 10% senior secured notes due 2014, S&P said.

The repayment of a portion of the company's 10% senior secured notes resulted in a lower level of secured debt outstanding under the simulated default scenario compared with the previous analysis, the agency said.

This increases recovery prospects for the 10% senior secured notes enough to warrant the upward revision, S&P said.

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