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S&P may lower Interstate Hotels
Standard & Poor's said it placed Interstate Hotels & Resorts Inc.'s B corporate credit rating on CreditWatch with negative implications.
The watch reflects concerns about the potential for Interstate to violate its financial maintenance covenants in 2009, given expectation for continued weakness in the lodging sector, the agency said.
Total debt-to-EBITDA ratio was in the low-5x at the end of September, versus a covenant level of 5.75x.
Given expectation for sustained weakness in the lodging sector in 2009 and its impact on Interstate's profitability, the agency said it is concerned that the cushion relative to covenants could deteriorate over the near term.
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