S&P: Gaylord Entertainment unaffected

Standard & Poor's said Gaylord Entertainment Co.'s (B/stable/--) announcement that is has entered into an agreement to purchase the 716-room Aston Waikiki Beach Hotel in Honolulu, Hawaii for $107 million will have no affect its ratings or outlook for the company.

The hotel previously was managed by Gaylord's ResortQuest subsidiary, and this transaction will ensure that ResortQuest retains this management contract in the future.

While this is a sizable acquisition for Gaylord, S&P said the company is expected to bring in a partner to own the majority of the equity in this property, and therefore, Gaylord's ultimate investment is expected to be very modest.

Moreover, since Gaylord's ownership interest in the hotel is expected to be small, S&P said the property is expected to be a relatively small contributor to Gaylord's overall earnings, limiting the likelihood that in a downside scenario it would provide meaningful support for joint venture borrowings that are expected to be structured on a non-recourse basis.

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