Fitch Upgrades Host Hotels’ Issuer Default Rating to ‘BBB’

Fitch Ratings said Friday it has upgraded the ratings of Host Hotels & Resorts (HST) and its operating partnership Host Hotels & Resorts, L.P., to ‘BBB’ from ‘BBB-‘. Fitch said that the rating outlook is stable. HST shares were down 0.1% in recent trading.

The international credit ratings agency cited Host’s RevPAR growth, which it expects to be moderately below the industry average during the year due to its exposure to upper-price-tier hotels and portfolio weightings in markets with weaker near-term outlooks. It also said that solid group demand and recently completed growth capex investments should support Host’s RevPAR growth during 2016 and 2017 of 3% and 1%, respectively.

Fitch also noted that Host has reduced its leverage from its down-cycle peak of 5.8x to 2.6x for the trailing 12-month (TTM) period ending June 30, 2016, and underscored the company’s large unencumbered asset pool provides an excellent source of contingent liquidity, and high-quality, geographically diversified portfolio of 98 consolidated luxury and upper upscale hotel properties.

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