Fitch trims Hilton loans

Fitch Ratings said it lowered Hilton Grand Vacations Borrower LLC’s revolver and term loan ratings to BB+/RR2 from BBB-/RR1 and affirmed its senior unsecured notes at BB/RR4. The agency also affirmed the BB issuer default ratings for Hilton Grand Vacations Borrower and Hilton Grand Vacations, Inc. (together HGV).

Hilton announced that it intends to acquire Bluegreen Vacations Holding Corp. (BVH) for $75/share, or $1.5 billion total enterprise value, in a 100% cash transaction.

“HGV plans to issue secured debt to fund the acquisition, which will increase EBITDA leverage slightly above Fitch's downgrade sensitivities. The expectation is that FCF will be used to reduce debt to bring leverage within sensitivities over time. Fitch points to the rapid deleveraging that occurred following HGV's acquisition of Diamond Resorts,” the agency said in a press release.

The outlook is stable.

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