S&P reviews Marriott debt, rates notes BB-

S&P said it assigned its BB- issue-level and 5 recovery ratings to Marriott Ownership Resorts Inc.'s proposed $750 million senior notes due in 2026. The rating is on CreditWatch with positive implications.

The agency also placed the BB- issue-level rating on the company's proposed unsecured exchange notes due in 2023 on CreditWatch with positive implications.

At the same time, the agency placed the BBB- issue-level rating on the company's proposed senior secured debt, including a proposed $600 million revolving credit facility and proposed $900 million term loan, on CreditWatch with negative implications.

S&P also revised the CreditWatch implications on its BB- issue-level rating on ILG Inc.'s existing $350 million senior unsecured notes to developing from negative.

Marriott Vacations plans to issue the senior notes due 2026 to partially fund its acquisition of ILG.

The CreditWatch positive placement on proposed notes reflects the possibility that recovery prospects for noteholders could improve if Marriott Vacations Worldwide Corp. does not successfully exchange its recently issued exchange notes for at least 50% of the $350 million of outstanding senior unsecured notes at ILG, S&P said.

Accordingly, the CreditWatch negative placement for the rating on the secured debt reflects a view that recovery prospects for secured lenders may be modestly impaired in the event that the exchange is unsuccessful, the agency said.

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