Hilton Hotels debt suffers rating drop.Hilton Hotels
Duff & Phelps Phelps may refer to: In places in the US:
The credit-rating agency said the downgrades reflect a combination of a bigger debt load in the last two years, and the weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. hotel
market.
Duff & Phelps said Hilton debt has risen "above historical levels...with fixed obligations ratio (debt-to-equity) increasing from 33 percent at the end of 1987 to 51 percent at June 30, 1990." Moreover, spending plans could increase the debt in the future. Hilton has some flexibility to reduce debt through the sale of hotels, lower spending programs and reduced arbitrage arbitrage: see foreign exchange. arbitrage Business operation involving the purchase of foreign currency, gold, financial securities, or commodities in one market and their almost simultaneous sale in another market, in order to profit from price , Duff & Phelps said. However, the current commercial real estate market makes hotel sales difficult and Hilton has just announced a six-million-share buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may program, Duff & Phelps said. Still, the credit-rating company said that Hilton remains a top owner, operator and franchiser of hotels, and that its four hotel-casinos in Nevada generally remain profitable with strong cash flow. |
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