Moody's rates Hilton Domestic notes Ba2

Moody's Investors Service said it assigned a Ba2 rating to Hilton Domestic Operating Co. Inc.'s planned $750 million senior unsecured note issuance due 2030.

The company is a subsidiary of Hilton Worldwide Finance, LLC, Moody's said.

All of Hilton's other ratings, including its Ba1 corporate family rating, Ba1-PD probability of default rating and Baa3 senior secured bank facility rating are unchanged.

The outlook is stable.

The proceeds of the planned issuance will be used to pay down the existing term loan B by $250 million and the revolver by $225 million, Moody's said.

The proceeds will be used for general corporate purposes, including share repurchases, the agency said.

Hilton's proposed issuance continues the company's credit positive trend of replacing its secured debt with unsecured debt while maintaining its net total leverage within its publicly stated target of 3x to 3.5x, Moody's said.

The company also recently improved its liquidity profile by increasing its revolver commitment to $1.75 billion from $1 billion and extended the expiration of the revolver to June 2024, the agency said.

The ratings are constrained by the company's high adjusted leverage relative to other Ba1-rated companies, Moody's said.

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