NEW YORK— Moodys Investors Service has assigned a Ba1 rating to Starwood Hotel & Resorts Worldwides new senior notes due April 2007 and 2012, and confirmed Starwoods Ba1 senior implied rating and other ratings, maintaining the negative rating outlook. These ratings reportedly reflect the increased risk of earnings volatility due to the weak economy and continued softness in the travel industry, as well as the likelihood that it will take time for the companys earnings to rebound. It was purported the rating confirmation also reflects Starwoods brand equity, scale and geographically diversified hotel portfolio. It is expected the proceeds of the aforementioned notes will be used to repay amounts under the companys senior secured notes facility as well as to repay a portion of the companys senior credit facility. As a result, Moody’s felt the issue should not impact credit statistics. It was further reported that all new debt will be pari passu with existing debt.
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