S&P rates Hilton Grand Vacations notes BB, loans BBB

S&P said it assigned its BB+ corporate credit rating to Hilton Grand Vacations Inc. The outlook is stable.

At the same time, S&P assigned a BBB issue-level rating and 1 recovery rating to both the company's proposed $200 million senior secured revolving credit facility due 2021 and $200 million senior secured term loan due 2021. The 1 recovery rating indicates an expectation for very high (90%-100%) recovery for lenders in the event of a payment default.

S&P also assigned a BB issue-level rating and 5 recovery rating to the company's proposed $300 million senior unsecured notes due 2024. The 5 recovery rating indicates an expectation for modest (10% to 30%; lower half of the range) recovery for lenders in the event of a payment default.

“The rating on HGV primarily reflects moderate leverage, the company's capital-light inventory sourcing model, and its strong brand, which are somewhat tempered by high expected EBITDA volatility over economic cycles, a reliance on external sources of capital to grow, and its presence in the highly competitive timeshare business,” said S&P credit analyst Emile Courtney in a news release.

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