Moody’s assigns Ba3 to Hilton notes

Moody's Investors Service said it assigned a Ba3 rating to the proposed $750 million senior unsecured notes being issued by Hilton Escrow Issuer LLC, an entity that will ultimately be merged with and into Hilton Domestic Operating Co. Inc., who will become the surviving issuer of the notes.

Both Hilton Escrow and Hilton Domestic are subsidiaries of Hilton Worldwide Finance, LLC.

Hilton Worldwide Finance’s Ba2 corporate family rating, Ba2-PD probability of default rating, Ba1 bank credit facilities and Ba3 senior unsecured notes due 2021 are unchanged.

The outlook remains stable.

Net proceeds from the new notes will be used to repay certain debt of Hilton's unrestricted U.S. real estate subsidiaries and to fund certain other liabilities and expenses of Park Hotels & Resorts Inc.

Moody’s said the Ba3 rating on the proposed senior unsecured notes acknowledges that the notes are guaranteed by Hilton Worldwide Finance and Hilton Worldwide Holdings Inc.

In addition, Hilton Domestic will guarantee the bank credit facilities and existing senior unsecured notes due 2021. Thus, the agency said it considers the proposed $750 million notes are pari passu with the existing senior unsecured notes at Hilton Worldwide Finance.

The Ba3 rating on the proposed notes also reflects the sizable amount of secured debt ahead of the notes in the capital structure, which includes $4.2 billion in term loans and a $1 billion secured revolving credit facility, Moody’s added.

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