S&P cuts Travelport

Standard & Poor's said it lowered its ratings on Travelport LLC, including lowering the corporate credit rating to B from B+.

The rating action reflects the company's more aggressive financial policy, which includes the addition of over $2 billion of debt to its capital structure to fund a $1.1 billion dividend to its owners and $1.090 billion to merge with Worldspan LP and integration risks associated with the company's pending merger with Worldspan, the agency said.

All ratings are removed from CreditWatch, where they were placed with negative implications on Dec. 7, S&P said.

In addition, the agency noted that it assigned its B corporate credit rating to Travelport Holdings Ltd., a holding company for the Travelport group of businesses and a parent company for Travelport LLC and CCC+ rating to Travelport Holdings' senior paid-in-kind loan.

The company's decision to use proceeds of the $1.1 billion PIK loan to pay Travelport's owners a dividend just seven months after the company's acquisition indicates a more aggressive policy, the agency said.

Ratings on Travelport reflect its highly leveraged financial profile, limited financial flexibility and the seasonal and cyclical nature of the travel industry, S&P noted.

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