Moody's raises Hotelbeds

Moody's Investors Service said it upgraded Hotelbeds' (HNVR Midco Ltd.) long-term corporate family rating to B3 from Caa1, the probability of default rating to B3-PD from Caa1-PD and the ratings of the backed senior secured revolving credit facility and backed senior secured term loans issued by HNVR Holdco Ltd. to B3 from Caa1.

“The upgrade reflects the company's strong earnings growth that supported the reduction in Moody's adjusted leverage to 6.9x in the 12 months that ended in April 2023 from 12.3x in fiscal 2022 (ending in September), as well as the improved maturity profile following the proposed amend and extend (A&E) transaction. Further earnings growth will support improvement in credit metrics over the next 12-18 months, including debt/EBITDA declining below 5.5x, strongly positioning the company in the current rating,” the agency said in a press release.

Additionally, Moody’s noted Hotelbeds plans to repay €100 million of the l €1 billion term loan B lowering its Moody's adjusted leverage to 6.6x from 6.9x for the 12 months that ended in April 2023.

Hotelbed’s maturity of €608 million of the €908 million remainder of term loan B will be extended to 2028 from 2025 and the maturity of most of the senior secured revolving credit facility will also be extended to 2026 from 2024, with the full existing revolver available until 2024.

The outlook remains positive.

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