S&P ups Hilton Worldwide loan to BB+

Standard & Poor’s said it revised its outlook on Hilton Worldwide Holdings Inc. to positive from stable. The BB- corporate credit rating on the company was affirmed.

At the same time, S&P revised the recovery rating on Hilton Worldwide Finance LLC’s senior secured credit facilities to 1 (90% to 100% recovery expectation) from 2 (70% to 90% recovery expectation) and raised the issue-level rating on these loans to BB+ from BB.

In addition, S&P affirmed the B issue-level rating on the company’s senior notes. The recovery rating on the debt remains 6 (0%-10% recovery expectation).

The revised senior secured recovery rating reflects a lower amount of secured debt outstanding under S&P’s simulated default scenario as a result of voluntary prepayments of the term loan and S&P’s assumption that the company will repay debt maturing over the 2014 to 2017 period with internal cash flow or borrowings under the revolver.

The outlook revision to positive reflects S&P’s belief that over the near term, Hilton could improve total adjusted debt to EBITDA to below 6x, the agency said.

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