Moody's rates Marriott Vacations notes B1

Moody's Investors Service said it assigned a B1 rating to Marriott Ownership Resorts, Inc.'s (a subsidiary of Marriott Vacations Worldwide Corp., herein combined with other subsidiaries as Marriott Vacations) planned $450 million senior note offering.

The company's other ratings are unchanged, including its Ba3 corporate family rating, Ba3-PD probability of default rating, Ba1 senior secured rating, Ba1 senior secured bank facility rating and existing B1 senior unsecured rating.

The outlook remains negative.

Proceeds from the planned $450 million senior unsecured eight-year note issuance will be used to redeem a portion of its 6˝% senior notes due 2026 and to pay transaction expenses and fees.

“The transaction is credit positive as it pushes out maturities by three years and results in interest savings,” Moody’s said in a news release.

“Despite the positive attributes of the transaction, Marriott Vacations' ratings and negative outlook are unchanged. The negative outlook continues to reflect Moody's expectation that Marriott Vacations' earnings will continued to be pressured causing debt/EBITDA to remain above its downgrade factor of 5.25x over the next 12 months.”

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