Fitch changes Softbank-backed Oyo’s long-term rating from ‘B-‘ to ‘B’

Ratings agency Fitch has revised its outlook on hospitality major Oyo, upgrading its long-term foreign and local currency issuer default ratings (IDRs) to ‘B’ from ‘B-’, with a ‘stable’ outlook.

Fitch has also upgraded the rating on the $660 million senior secured term loan facility (outstanding $448 million) due 2026 issued by Oyo’s fully owned subsidiary, Oravel Stays Singapore, to ‘B’ from ‘B-‘.

The agency said that the upgrade reflects its estimate that Oyo’s Ebitda leverage will improve to below 5X on sustained Ebitda growth amid cost savings, a demand recovery in the short-term stay market and Oyo’s buyback of $195 million in debt in November 2023.