S&P rates Choice Hotels notes BBB

Standard & Poor's said it assigned a BBB rating to Choice Hotels International Inc.'s proposed $250 million senior notes due 2020.

The BBB corporate credit rating was affirmed.

The outlook is stable.

Proceeds to partly repay outstanding revolver balances.

"The BBB rating reflects Choice's large and diverse base of franchised hotels that operate under several different brands; a franchise business model, which is not capital intensive and offers relatively stable operating cash flows; and an 'intermediate' financial risk profile," S&P analyst Emile Courtney said in a statement.

"The company's relatively small asset and cash flow base, along with the cyclical nature of the lodging industry, temper these factors."

Management's stated financial policy that adjusted leverage of around 3x is optimal currently constrains the rating, the agency said.

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