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Moody’s eyes ESH for downgrade
Moody's Investors Service said it placed ESH Hospitality, Inc.'s ratings on review for downgrade, including its Ba3 senior unsecured debt and its Ba2 senior secured bank credit facility. The speculative grade liquidity rating is SGL-3. The agency changed the outlook to under review from negative.
The rating action follows the announcement that ESH and its parent, Extended Stay America, Inc. (ESA) agreed to be acquired by a 50/50 joint venture between funds managed by Blackstone Real Estate Partners and Starwood Capital Group in an all-cash transaction valued at about $6 billion.
“The acquisition heightens ESH's risk profile. During the review, Moody's will assess the implications of the merger for ESH's existing creditors, including the potential impacts on leverage, liquidity and capital policy,” the agency said in a press release.
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