S&P lowers Hilton Grand Vacations

S&P said it downgraded Hilton Grand Vacations Inc. to B+ from BB and its revolving credit facility to BB as previously indicated to be in line with the rating on the $1.3 billion senior secured term loan B.

In May, the agency warned it would likely downgrade the issuer rating by two notches

“The B+ rating reflects high pro forma leverage in 2021 and potentially 2022, the significant funded debt assumed in the Diamond acquisition, and potential operating variability during the integration process. We forecast high pro forma captive-adjusted debt to EBITDA in the 6x-6.5x range in 2021, which we believe could improve to the 4.5x-5.5x range in 2022 if travel and timeshare sales recover as we assume in our base case,” the agency said in a press release.

The outlook is stable.

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