Moody’s gives Hilton Domestic notes B2

Moody's Ratings said it assigned a Ba2 rating to Hilton Domestic Operating Co. Inc.'s, together with Hilton Worldwide Holdings Inc., new $1 billion senior unsecured notes. Hilton plans to sell the notes in two tranches a $500 million tranche due 2029 and another $500 million due 2032.

The company's other ratings remain unchanged, including the Ba1 corporate family rating, the Ba1-PD probability of default rating, the Baa2 backed senior secured credit facility rating and the existing Ba2 senior unsecured and backed senior unsecured ratings, Moody’s said. The company's speculative grade liquidity rating remains SGL-1.

The company stated that proceeds will be used for general corporate purposes, including to repay revolver borrowings of $200 million and for investments and acquisitions.

“Moody's views this transaction as modestly credit negative as it will likely increase total debt outstanding. However, ratings are unchanged as the addition of $800 million of incremental debt will increase Hilton's debt/EBITDA to 3.8x from 3.5x at the end of 2023, still within the 3.5x – 4.5x range Moody's has cited for the Ba1 rating,” the agency said in a press release.

The stable outlook is unchanged.

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