S&P upgrades Hilton

S&P said it raised the corporate credit rating on Hilton Worldwide Holdings Inc. to BB+ from BB.

The agency also said it raised the rating on the company's senior secured credit facility to BBB from BBB-. The 1 recovery rating on the senior secured facility is unchanged, reflecting 90% to 100% expected default recovery.

S&P also said it raised the rating on the senior unsecured notes to BB+ from BB.

The 4 recovery rating on the notes is unchanged, reflecting 30% to 50% expected default recovery.

The outlook is positive.

The upgrades follow the filing of Forms 10 to spin most of Hilton's real estate and its timeshare business into two separate publicly traded companies called Parks Hotels & Resorts Inc. and Hilton Grand Vacations, respectively, S&P explained.

The upgrades also consider an expectation for sustained leverage of 5x through 2017, which are well inside the upgrade leverage thresholds, the agency said.

S&P said it is raising the rating now because it can reasonably estimate changes to the company's capital structure and the amount of EBITDA that will remain at Hilton operating company.

The spins of most of the company's real estate and the timeshare business also are expected to be modest leveraging events, the agency said.

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