S&P assigns BB to Hilton Worldwide notes

S&P said it assigned its BB issue-level rating and 4 recovery rating to the proposed $500 million senior unsecured notes due 2025 to be issued by Hilton Domestic Operating Co., Inc., a wholly owned subsidiary of Hilton Worldwide Holdings Inc.

The rating on the proposed unsecured notes is the same as S&P’s ratings on existing unsecured debt issued by Hilton. The 4 recovery rating reflects an expectation for average (30%-50%; rounded estimate: 30%) recovery for unsecured lenders in the event of a payment default.

S&P’s BB issuer credit rating and all other ratings on Hilton are unchanged.

The outlook is negative.

“We could lower the rating if we lose confidence that Hilton can quickly recover following a significant spike in leverage in 2020 and leverage in 2021 deteriorates to above 6x,” S&P said in a news release.

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