S&P affirms LodgeNet

Standard & Poor's said it affirmed its bank loan rating and lowered its recovery rating, on the senior secured credit facilities of LodgeNet Entertainment Corp. (B+/stable), following the announcement that the company will add $225 million to its first-lien debt through a delayed-draw term loan.

The B+ bank loan rating is the same as the corporate credit rating on the company, S&P said, adding that it revised the recovery rating to 3, indicating an expectation of meaningful recovery of principal in the event of a payment default.

"The recovery rating was lowered from 3 from 2 because the additional first-lien secured debt reduces the recovery prospects of all first-lien debtholders," said S&P credit analyst Tulip Lim.

"The repricing of the first-lien debt also decreases the recovery prospects, as we use interest expense as an input in our default scenario."

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