Moody's ups Starwood outlook to positive

Moody's Investors Service said it confirmed Starwood Hotels & Resorts Worldwide Inc.'s Ba1 corporate family rating and Ba1 senior unsecured bonds, affirmed its SGL-2 rating and revised the rating outlook to positive. Moody's also confirmed Sheraton Holdings Corp.'s bonds at Ba1. This completes the review of both companies' ratings that began on Nov. 14.

Moody's said the change in outlook reflects improved credit metrics in 2005 as a result of higher earnings and lower debt levels, a more consistent financial policy and the positive impact on the company's credit profile from the pending sale of up to 35 hotels to Host Marriott.

As a result of the Host transaction, the agency expects that Starwood will reduce debt levels commensurate with the reduction in net EBITDA from sold assets, lower earnings concentration in certain markets and, as a result, have a significantly reduced level of secured debt, a less complicated corporate structure and lower exposure to more cyclical owned hotel earnings.

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