Moody’s lowers Marriott Vacations, rates notes Ba1

Moody’s Investors Service said it downgraded the ratings of Marriott Ownership Resorts, Inc. (a subsidiary of Marriott Vacations Worldwide Corp., herein combined with other subsidiaries as Marriott Vacations.

The downgrades include its corporate family rating to Ba3 from Ba2, its probability of default rating to Ba3-PD from Ba2-PD, its senior secured rating to Ba1 from Baa3, and its senior unsecured rating to B1 from Ba3.

At the same time, Moody’s assigned a Ba1 rating to the company’s planned senior secured note issuance and downgraded the company’s speculative grade liquidity rating to SGL-3 from SGL-2. The outlook was revised to negative from stable.

“The downgrade reflects Moody’s expectation that Marriott Vacations’ earnings will be pressured in 2020 and 2021 due to travel restrictions and the macroeconomic weakness related to the spread of the coronavirus (Covid-19) which will lead to debt/EBITDA remaining above 5x for at least the next two years,” stated Pete Trombetta, a Moody’s lodging and cruise analyst, in a press release.

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