S&P cuts Ryman Hospitality notes to BB-

S&P said it lowered its issue-level ratings on Ryman Hospitality Properties Inc.'s $350 million of senior unsecured notes due in 2021 and $400 million of senior unsecured notes due in 2023 (both issued by subsidiary RHP Hotel Properties LP and RHP Finance Corp.) to BB- from BB and revised the recovery rating to 2 from 1 following the upsizing of the company's proposed senior secured term loan B to $500 million from $400 million.

The additional secured debt in the capital structure impairs recovery prospects for unsecured lenders sufficiently to result in the revised recovery rating.

The 2 recovery rating indicates an expectation for substantial (70%-90%; rounded estimate: 75%) recovery for lenders in the event of a default.

The company plans to use the proceeds from the increased term loan B to repay borrowings under its revolving credit facility.

Although the transaction is leverage neutral, S&P said it revised the recovery rating because its recovery analysis already assumes that the revolver is 85% drawn at default, thus the additional term loan borrowings result in an assumed increased estimate of secured debt outstanding at default.

The BB issue-level ratings and 1 recovery ratings on Ryman's senior secured revolver, proposed senior secured term loan A, and proposed senior secured term loan B are unchanged. The corporate credit rating is also unchanged.

© 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.