S&P puts Hilton Grand on watch

S&P said it placed all its ratings for Hilton Grand Vacations Inc., including the BB debt ratings, on CreditWatch with negative implications.

Hilton Grand Vacations Inc. plans to buy Bluegreen Vacations Holding Corp. at an enterprise valuation of about $1.5 billion. The deal will be funded by $1.8 billion of new debt. S&P Global Ratings said it forecasts the pro forma entity to have total corporate debt of about $4.7 billion at close, excluding nonrecourse securitization debt. The acquisition is expected to close in the first half of 2024.

“We believe pro forma captive-adjusted debt to EBITDA will be about 6x in fiscal 2024 and could remain at or above our 4.5x downgrade threshold at the BB rating in 2024,” S&P said in a press release.

The agency warned it could trim Hilton Grand Vacations a notch due to the higher leverage. S&P said aims to resolve the negative watch over the next several months.

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