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S&P puts Extended Stay on watch
S&P said it placed all its Extended Stay America Inc. ratings on CreditWatch with negative implications.
The placement follows Extended Stay and its paired-share REIT ESH Hospitality Inc., reporting they agreed to be acquired by Blackstone Real Estate Partners and Starwood Capital Group in an all-cash transaction valued at about $6 billion, S&P said.
“We will review the proposed new capital structure and the effect it could have on credit measures. Our recently revised base case assumes a recovery in Extended Stay's business in 2021 compared to 2020, and an improvement in our measure of lease-adjusted net debt to EBITDA to the low- to mid-5x range in 2021,” the agency said in a press release.
S&P said it plans to resolve the CreditWatch over the next few months after reviewing additional disclosures and the financing plan’s terms.
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