S&P cuts Extended Stay America

S&P said it downgraded Extended Stay America Inc. to B+ from BB-, citing an “unprecedented” loss of revenue from the pandemic.

Also, the agency lowered the issue-level rating on the company's senior secured debt to BB from BB+, in line with the lowered issuer credit rating. S&P affirmed the BB- rating on the unsecured debt.

As a result of the Covid-19-related travel downturn, we assume Extended Stay's 2020 revenue per available room (RevPAR) could decrease about 20%, EBITDA could decline about 30-40%, and leverage will spike,” S&P said in a press release.

The outlook is negative.

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