Conroe defaults on interest payment for $147M hotel, triggers credit downgrade to ‘D’ rating

The city of Conroe’s local government corporation defaulted on an interest payment on its $147 million Hyatt Regency Hotel and Convention Center, resulting in another credit downgrade from a major ratings agency.

The hotel and convention center, which opened in May 2023, is the largest taxpayer-funded economic development project in Conroe. However, due to missed economic projections, the project has been dogged by cost overruns and multimillion-dollar taxpayer bailouts. In an April 16 report, S&P Global Ratings analysts lowered the rating on the corporation’s second-lien hotel revenue bonds to a D from CCC. It is the lowest rating assigned by major credit agencies.

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