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Moody's ups Starwood Hotels to SGL-2
Moody's Investors Service said it raised Starwood Hotels & Resorts Worldwide Inc.'s speculative grade liquidity rating to SGL-2 from SGL-3. The company's corporate family rating was affirmed at Ba1, probability of default rating at Ba1, senior unsecured bonds and debentures at Ba1 (LGD 4, 56% from 55%), senior unsecured shelf at provisional Ba1 (LGD4, 56% from 55%) , senior subordinate shelf at provisional Ba2 (LGD6, 97%) and preferred debt shelf at provisional Ba2 (LGD6, 97%).
The outlook is stable.
The upgrade reflects the extension of its bank loan maturity to November 2013 from February 2011, alleviating concerns about the bank credit facility becoming current, Moody's said.
While the company's credit facility was reduced as part of the refinancing process to $1.5 billion from $1.88 billion, Moody's said it expects Starwood's internally generated cash and balance sheet cash will be sufficient to cover working capital, capital expenditures and other basic cash obligations. So, a majority of the company's credit facility is expected to remain undrawn in the foreseeable future, the agency said.
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