S&P rates Hilton loans & notes BB, notes B

Standard & Poor's said it assigned Hilton Worldwide Holdings Inc. a BB- corporate credit rating.

The outlook is stable.

At the same time, the agency assigned the company's proposed $6.85 billion senior secured credit facility (consisting of a $1 billion revolver due 2018, an $850 million term loan B-1 due 2018 and a $5 billion term loan B-2 due 2020) its BB issue-level rating (one notch above the corporate credit rating) with a recovery rating of 2, indicating an expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default.

S&P also assigned the company's proposed $1.25 billion senior secured notes due 2021 a BB issue-level rating (one notch above the corporate credit rating) with a recovery rating of 2.

The company's proposed $1 billion senior unsecured notes due 2021 and $1 billion senior unsecured notes due 2023 were assigned a B issue-level rating (two notches below the corporate credit rating) with a recovery rating of 6, indicating an expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default.

Hilton plans to use the proceeds from these debt issuances, along with proceeds from a planned and not-yet-rated $3.5 billion CMBS issuance and a $525 million bank loan secured by the Waldorf Astoria New York, to repay existing debt balances.

S&P said the BB- corporate credit rating reflects its assessment of Hilton's business risk profile as "strong" and its assessment of the company's financial risk profile as "highly leveraged," according to criteria.

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