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Moody's upgrades Hilton Hotels
Moody's Investors Service said it upgraded Hilton Hotels Corp.'s corporate family rating to Ba1 from Ba2 and its senior secured bank facility, bonds, debentures and convertible notes to Ba1 (LGD4) from Ba2 (LGD4). The commercial paper rating was confirmed at Not Prime.
The outlook is stable.
The agency said the upgrade reflects a faster-then-expected pace of leverage reduction due to asset sales and strong earnings during 2006. The adjusted debt-to-EBITDAR ratio improved to around 5x from 6x in January 2006.
The stable outlook reflects the solid outlook for demand for Hilton Hotels and limited supply additions, Moody's said. The outlook could move to positive if the company continues to execute its asset sale program at reasonable multiples and uses the proceeds to repay debt, resulting in an adjusted debt-to-EBITDAR ratio of around 3.75x.
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