S&P ups Ryman Hospitality Properties

S&P said it upgraded Ryman Hospitality Properties Inc.’s issuer rating to B from B-, its senior secured debt rating to BB- from B+ and the senior unsecured debt rating to B+ from B.

“The upgrade to B reflects our view that a recovery in group travel in 2022 could substantially improve the company's total RevPAR and drive substantial improvement in its credit measures. Ryman reported on its first quarter earnings call that it currently has booked group room revenue for this year that is 5% higher than at the same time in 2019 due to a post-omicron variant burst of group demand at a higher ADR than 2019,” the agency said in a press release.

“We also expect the company could expand its EBITDA margin materially by about 800 basis points in 2022, modestly below 2019, as the expected recovery in its total RevPAR is modestly offset by rising labor costs. Therefore, we expect that Ryman's S&P Global Ratings-adjusted leverage could improve to about 7x in 2022, its EBITDA coverage of interest expense could improve to about 3x-4x, and free operating cash flow to debt could be about 5%,” S&P added.

The outlook is stable.

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