S&P takes Hard Rock Hotel off negative watch

Standard & Poor's said it affirmed Hard Rock Hotel Inc.'s B+ corporate credit and senior secured debt ratings and removed them from CreditWatch with negative implications, where they were placed on May 17, 2005.

The outlook is negative.

The CreditWatch listing related to the potential for the Hard Rock to acquire portions of the expansion project, which is located adjacent to the property and is being completed by parties affiliated with the Hard Rock. S&P said it is still concerned that such an investment could take place, and that it could negatively affect the credit profile of the Hard Rock, but the timing and amount of any investment remains unclear, so the agency removed the ratings from CreditWatch to reflect the position that an imminent downgrade is not likely.

Still, the negative outlook reflects the possibility that ratings could still be lowered in the next few quarters if a sizable transaction is announced.

S&P said the ratings reflect the company's lack of cash flow diversity, small cash flow base and location in a competitive market. More positively, the hotel's revenues have increased 17% year-over-year, debt leverage improved to 4.5x as of Sept. 30 and the EBITDA margin for the 12 months ended Sept. 30 was 26.3%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.