S&P gives BBB- to Host Hotels loans

S&P said it assigned its BBB- issue-level rating and 2 recovery rating to Host Hotels & Resorts Inc.'s subsidiary Host Hotels & Resorts LP's $1.5 billion credit facilities consisting of a $500 million term loan due 2021 and a $1 billion revolving credit facility due 2021.

The 2 recovery rating indicates an expectation for substantial (70% to 90%; rounded estimate: 85%) recovery for lenders in the event of a payment default.

The company used the proceeds from the new credit facilities to refinance its $500 million term loan due 2017 and its $1 billion revolving credit facility due 2018.

S&P said it also affirmed the BBB- issue-level rating on Host's senior notes and existing $500 million term loan due 2020, which will remain outstanding. S&P revised the recovery rating on the term loan and notes to 2 from 1.

“Although the BBB- issue-level rating on the new credit facilities is the same issue-level rating as the prior facilities, the 2 recovery rating is less favorable than the recovery rating on the prior credit facilities because we generally cap our recovery rating on unsecured debt to account for the greater risk of the impairment of recovery prospects by the issuance of additional secured or pari passu debt prior to default,” S&P said in a news release.

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