S&P lowers Hilton secured loans, lifts notes

S&P said it reviewed the recovery and issue-level ratings on Hilton Grand Vacations Inc. that were considered under criteria observation after the agency published revised recovery ratings criteria Dec. 7.

With the criteria review complete, S&P said it lowered the debt ratings on the company’s $200 million senior secured revolving credit facility and $200 million senior secured term loan to BBB- from BBB because the ratings now are capped for speculative-grade issuers at BBB-, regardless of the recovery rating.

This change de-emphasizes the weight recovery plays in notching up issue ratings for issuers near the investment-grade threshold since recovery is a smaller component of credit risk when default risk is more remote particularly considering recovery prospects may be less predictable and more variable for these issuers, the agency said.

This revision does not reflect a change in the assessment of the company's default risk, which is indicated by the corporate credit rating, S&P said, or the opinion of recovery given default, which is indicated by the recovery ratings.

The recovery rating on Hilton Grand’s senior secured facilities remains at 1, indicating 90% to 100% expected default recovery.

S&P said it raised the rating on the company's $300 million senior unsecured notes due 2024 to BB+ from BB and revised the recovery rating on this debt to 4 from 5.

The 4 recovery rating indicates 30% to 50% expected default recovery.

These rating actions stem solely from the application of the revised recovery criteria and do not reflect any change in the assessment of the corporate credit ratings on issuers of the affected debt issues, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.