S&P lowers Hilton Worldwide

S&P said it reviewed the recovery and issue-level ratings on Hilton Worldwide Holdings Inc. that were considered under criteria observation (UCO) after the agency published its revised recovery ratings criteria Dec. 7.

With the criteria review complete, the agency said it lowered the secured debt rating to BBB- from BBB because the issue ratings for speculative-grade issuers now are capped at BBB- regardless of the recovery rating.

This change de-emphasizes the weight recovery plays in notching up issue ratings for issuers near the investment-grade threshold since recovery is a smaller component of credit risk when default risk is more remote, particularly considering recovery prospects may be less predictable and more variable for these issuers, S&P said.

Importantly, this revision does not reflect a change in the assessment of the company's default risk, which is indicated by the corporate credit rating, the agency said, or the opinion of recovery given default, which is indicated by the recovery ratings.

The recovery rating on Hilton's secured debt remains at 1, indicating 90% to 100% expected default recovery. The issue-level rating on Hilton's unsecured debt remains at BB+ with a 4 recovery rating, indicating 30% to 50% expected default recovery.

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