Fitch rates Host Hotels notes, loan BB

Fitch Ratings said it assigned a BB issuer default rating to Host Hotels & Resorts, Inc. and a BB rating to all series of unsecured debt issued by Host Marriott LP, a BB rating to the company's unsecured credit facility and a B+ rating to Host's preferred stock.

The outlook is stable.

The agency said the ratings reflect Host's geographically diverse and high-quality portfolio of hotel properties with the company's recent Starwood acquisition particularly enhancing these attributes. Host has shown the ability to maintain solid coverage and leverage metrics, has considerably improved operating performance in recent quarters, continues to employ a varied capital structure and has demonstrated its ability to repeatedly access the capital markets through unsecured note, preferred stock and equity offerings as well as mortgage financings over the last several years. Debt to EBITDA was 4.2x for the most recent quarter, which compares favorably to its hotel company peers.

The ratings are balanced by Host's sensitivity to economic cycles and the close link between its performance and GDP growth, Fitch said. In addition, the transient nature of the lodging industry without the existence of long-term contracts presents more inherent risk than in other real estate segments.

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