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S&P turns RLJ Lodging view to stable
S&P said it changed its outlook for RLJ Lodging Trust to stable from negative and affirmed the B+ issuer and BB- senior secured ratings.
“The outlook revision reflects our revised and more favorable assumptions for RLJ's RevPAR, EBITDA, and leverage in 2022 due to ongoing strong leisure demand and the anticipated recovery in business transient and group bookings. As a result, our measure of RLJ's lease and preferred stock adjusted leverage could improve to around 6x in 2022 absent unanticipated leveraging transactions,” S&P said in a press release.
The agency said it forecast RLJ to expand its EBITDA margin in 2022 to around 2019 levels. These assumptions result in leverage below the 6.5x downgrade threshold in 2022.
“In 2023, we expect that RevPAR improvement above 2019 levels and a modest expansion of EBITDA margin could improve leverage to around 5x,” S&P said.
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