Rating Agency Lowers Outlook for Hilton

Moody’s Investors Service said it changed its outlook for Beverly Hills-based Hilton Hotels Corp. to “negative” to reflect a potential slowdown in the company’s earnings growth amid a weakening economy. The ratings firm said it was concerned that the prospect of slower earnings growth will hamper Hilton’s ability to reduce debt as quickly as Moody’s had anticipated. Moody’s, however, did not change Hilton’s Baa3 rating on an estimated $5 billion in senior unsecured debt. Hilton Chief Financial Officer Matthew Hart said the firm was “‘very surprised and disappointed” with Moody’s action. He noted that advance room bookings are solid, room supply growth is diminishing and Hilton’s franchise business remains healthy. Hilton shares fell 13 cents to close at $11.88 on the New York Stock Exchange.