S&P upgrades Ryman

Standard & Poor's said it revised the recovery rating on Ryman Hospitality Properties Inc.'s 6¾% senior notes due 2014 to 1, reflecting 90% to 100% expected recovery in a default, from 5, which indicated 10% to 30% expected default recovery.

The agency also said it raised the rating on the notes to BB from B.

Ryman recently announced that it will redeem the 6¾% senior notes on Jan. 17, 2013, using availability under its credit facility. At that time, S&P said it will withdraw the ratings on the notes.

This action has no effect on the B+ corporate credit rating on the company.

The outlook is stable.

The revised recovery rating reflects a change in the approach in determining Ryman's recovery value under the simulated default scenario.

S&P said it now uses a discrete asset valuation based on distressed real estate values. Previously, it used an enterprise valuation based on estimated distressed cash flow levels after a hypothetical payment default.

The ratings reflect the company's weak business risk profile and aggressive financial risk profile, the agency said.

The ratings also consider its limited asset diversity and small hotel portfolio, S&P said.

But the company does have good quality properties that target group and convention customers, which provides some advance booking visibility and offsets business risks, the agency said.

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