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S&P assigns BBB to Hyatt notes
S&P said it assigned its BBB issue-level rating to Hyatt Hotels Corp.'s proposed $400 million senior notes due 2028.
Hyatt may use the proceeds from the notes to redeem its $196 million senior notes due 2019, repay other secured debt and for other general corporate purposes, which could include share repurchases or acquisitions.
As a result, the transaction could add modest leverage, S&P said.
However, Hyatt currently has significant leverage capacity compared with S&P’s 3x downgrade threshold, with a measure of lease adjusted debt to EBITDA at 1.5x as of June, the agency added.
“Our current base-case forecast is for this measure to be in the mid-1x area in 2018, assuming no acquisitions in the second half of 2018. This is because of a meaningful level of surplus cash that we net from debt balances,” S&P said in a news release.
The company's BBB issuer credit rating and stable outlook are unchanged.
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