S&P rates AC Ocean Walk facilities B+, B-, CCC

S&P said it assigned a B- corporate credit rating to AC Ocean Walk LLC.

The outlook is stable.

At the same time, the agency assigned a B+ issue-level rating to the company’s proposed $5 million priority revolving credit facility. The 1 recovery rating indicates an expectation for very high recovery (90% to 100%; rounded estimate: 95%) of principal for lenders in the event of a payment default.

S&P also assigned a B- issue-level rating to the proposed $175 million first-lien term loan facility due 2022. The 3 recovery rating indicates an expectation for meaningful recovery (50% to 70%; rounded estimate: 50%).

Additionally, the agency assigned a CCC issue-level rating to the proposed $75 million second-lien payment-in-kind term loan facility due 2023. The 6 recovery rating indicates an expectation for negligible recovery (0% to 10%; rounded estimate: 0%).

S&P said the rating on AC Ocean Walk reflects the challenges in opening and ramping up a new property in a highly competitive and relatively stagnant market, particularly given the high-profile nature of the property's previous owners' multiple bankruptcies and subsequent property closure in 2014.

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