S&P rates Hilton notes BB+

S&P said it assigned its BB+ issue-level rating to Hilton Worldwide Holdings Inc.'s subsidiary borrower Hilton Domestic Operating Co. Inc.'s proposed $500 million senior notes due 2026.

The 4 recovery rating reflects an expectation for average (30% to 50%; rounded estimate: 35%) recovery in the event of a default.

All other ratings are unchanged.

Hilton plans to use the proceeds along with cash on hand and drawings under its revolver to finance the repurchase of up to 16.5 million shares (equivalent to $1.25 billion) of its stock from HNA HLT Holdco I LLC.

“Despite the incremental unsecured debt issuance, we did not lower our issue-level ratings, or revise our recovery rating unfavorably, partly because we modestly increased our emergence valuation to reflect recent systemwide room growth,” the agency said in a news release.

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