S&P gives BB to Vail Resorts notes

S&P said it assigned its BB issue-level rating (the same level as the long-term issuer credit rating) and 3 recovery rating to the proposed senior notes issued by Vail Resorts Inc. due 2032. The 3 recovery rating indicates an expectation of meaningful (50%-70%; rounded estimate: 65%) recovery for lenders in the event of a default.

Vail intends to use the proceeds from the notes to refinance its $600 million outstanding senior notes due 2025. At the same time, the company completed an amendment of its $984 million term loan (not rated) to extend the maturity to 2029 from 2026.

“Despite leverage below our 3.25x upgrade threshold, the stable outlook reflects the risk the company pursues a more aggressive merger and acquisition (M&A) strategy and increases shareholder returns through share repurchases that we haven't incorporated into our base case,” S&P said in a news release.

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