S&P gives La Quinta facility BB-

Standard & Poor's said it assigned La Quinta Holdings Inc. a preliminary B+ corporate credit rating.

The outlook is stable.

At the same time, the agency assigned the company's proposed $2.35 billion senior secured credit facility (consisting of a $250 million revolver due 2019 and $2.1 billion first-lien term loan due 2021) its preliminary BB- issue-level rating (one notch above the corporate credit rating) with a preliminary recovery rating of 2, indicating our expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default.

The revolving credit facility is expected to be undrawn at close.

La Quinta plans to use the proceeds from this debt issuance, in addition to proceeds from a planned IPO that is expected to close concurrently to the debt close, to repay existing debt balances and for transaction fees and expenses. The ratings are preliminary, based on the closing of the transaction and a successful IPO execution.

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