Fitch gives BB- to Motel One loan

Fitch Ratings said it assigned One Hotels GmbH (Motel One) an expected long-term issuer default rating of B+(EXP). The outlook is stable.

Fitch also assigned it an expected senior secured debt rating of BB- with a recovery rating of RR3 to the proposed €800 million term loan B.

The company plans to use proceeds from senior secured debt, including proposed term loan B, to refinance bridge facilities obtained to finance the buyout of a minority shareholder’s 35% stake.

The B+(EXP) rating reflects Motel One's moderate business scale and diversification balanced by superior profitability and expected positive free cash flow (FCF) generation. It also assumes the company will deleverage over the next three years as post-transaction leverage is high and outside of the range that is commensurate with a B+(EXP) rating, Fitch said in a news release.

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