S&P ups Interval Leisure

Standard & Poor's said it raised the corporate credit rating on Interval Leisure Group Inc. to BB+ from BB, along with the rating on its senior secured credit facility to BBB from BBB-. The recovery rating remains unchanged at 1, indicating 90% to 100% expected recovery in a default.

The agency also said it raised the rating on Interval's senior notes to BB+ from BB with the recovery rating revised to 4 from 3.

The 4 rating indicates 30% to 50% expected recovery in a default. The revision of the recovery rating reflects an assumed increased decline in cash flow now that the senior secured term loan will be repaid in full at its 2013 maturity, the agency said.

The term loan repayment results in a lower level of cash flow at default due to a decrease in total interest expense and the absence of any required term loan amortization, S&P said.

The outlook is stable.

The upgrade reflects Interval's good operating performance and debt repayment throughout 2010 that modestly exceeded expectations, causing leverage to improve to a level currently good for the BB+ rating, the agency said.

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