Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE:
PK) announced today that certain of its subsidiaries, Park
Intermediate Holdings LLC (the “Operating Company”), PK Domestic
Property LLC (“PK Domestic LLC”) and PK Finance Co-Issuer Inc.
(together with the Operating Company and PK Domestic LLC, the
“Issuers”), completed the previously announced offering of $725
million aggregate principal amount of 5.875% senior secured notes
due 2028 (the “Notes”). The Notes will pay interest semi-annually
in arrears, at a rate of 5.875% per year, and will mature on
October 1, 2028. The Notes are guaranteed by Park and certain
subsidiaries of the Operating Company that guarantee the Company’s
senior credit facilities and existing senior secured notes due
2025. The Notes are secured, subject to permitted liens, by a first
priority security interest in all of the capital stock of certain
wholly owned subsidiaries of certain of the guarantors and PK
Domestic LLC, which collateral also secures the obligations under
the Company’s senior credit facilities and existing senior secured
notes due 2025 on a first priority basis.
The Issuers used $631 million of the net proceeds of the
offering to fully repay the Company’s existing term loan maturing
in December 2021 and used the remaining net proceeds to repay $80
million outstanding under the Company’s revolving credit facility
(the “Revolver”).
Upon closing of the offering, the Company’s previously announced
amendments to its Revolver and $670 million term loan maturing in
August 2024 became effective (the “Credit Amendments”). Among other
things, the Credit Amendments increase the commitments under the
Revolver by $75 million to $1.075 billion, extend the waiver period
for the testing of the financial covenants under the credit
facilities from the date the financial statements are delivered for
the quarter ending June 30, 2021 to the date the financial
statements are delivered for the quarter ending March 31, 2022, and
extend the maturity of the Revolver from December 2021 to December
2023 with respect to 90.1% of the Revolver commitments. Giving
effect to the Notes offering and Credit Amendments, the Company’s
total liquidity as of July 31, 2020 would have been $1.7 billion,
inclusive of approximately $475 million available for borrowing
under its Revolver.
“I am extremely pleased with the execution of our simultaneous
Revolver extension, credit facility amendments and successful bond
offering,” said Thomas J. Baltimore, Jr., Chairman and CEO of Park.
“These concurrent transactions were purposefully designed to
further extend our debt maturity profile, provide for incremental
liquidity and obtain additional financial covenant relief which
will allow us the flexibility to execute our business plan in an
environment that continues to be challenging. Moreover, the high
participation rate for the Revolver extension, and successful
upsizing and pricing of our notes, demonstrates the support for our
team’s proactive management during this crisis, our high-quality
portfolio, and our ability to diversify our capital sources.”
The Notes and the related guarantees were not registered under
the Securities Act of 1933, as amended (the “Securities Act”), or
any state securities laws. The Notes were not offered or sold in
the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and applicable state securities laws. The Notes were
offered only to persons reasonably believed to be “qualified
institutional buyers” in reliance on the exemption from
registration provided by Rule 144A under the Securities Act and to
certain non-U.S. persons in offshore transactions in reliance on
Regulation S under the Securities Act.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy any securities and shall not
constitute an offer to sell or a solicitation of an offer to buy,
or a sale of, the Notes or any other securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include, but are not limited
to, statements related to Park’s current expectations regarding the
performance of its business, financial results, liquidity and
capital resources, the effects of competition and the effects of
future legislation or regulations, the expected completion of
anticipated dispositions, the declaration and payment of future
dividends, and other non-historical statements. Forward-looking
statements include all statements that are not historical facts,
and in some cases, can be identified by the use of forward-looking
terminology such as the words “outlook,” “believes,” “expects,”
“potential,” “continues,” “may,” “will,” “should,” “could,”
“seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,”
“anticipates” or the negative version of these words or other
comparable words. You should not rely on forward-looking statements
since they involve known and unknown risks, uncertainties and other
factors which are, in some cases, beyond the Company’s control and
which could materially affect its results of operations, financial
condition, cash flows, performance or future achievements or
events. Currently, one of the most significant factors is the
potential adverse effect of COVID-19, including possible
resurgences, on the Company’s financial condition, results of
operations, cash flows and performance, its hotel management
companies and its hotels’ tenants, and the global economy and
financial markets. The extent to which COVID-19 impacts the
Company, its hotel managers, tenants and guests at the Company’s
hotels will depend on future developments, which are highly
uncertain and cannot be predicted with confidence, including the
scope, severity and duration of the pandemic, the actions taken to
contain the pandemic or mitigate its effect, additional closures
that may be mandated or advisable even after the reopening of
certain of the Company’s hotels on a limited basis, whether due to
an increased number of COVID-19 cases or otherwise, and the direct
and indirect economic effects of the pandemic and containment
measures, among others.
Forward-looking statements involve risks, uncertainties and
assumptions. Actual results may differ materially from those
expressed in these forward-looking statements. You should not put
undue reliance on any forward-looking statements and Park urges
investors to carefully review the disclosures Park makes concerning
risk and uncertainties in Item 1A: “Risk Factors” in Park’s
Quarterly Reports on Form 10-Q for the quarters ended March 31,
2020 and June 30, 2020 and Annual Report on Form 10-K for the year
ended December 31, 2019, as such factors may be updated from time
to time in Park’s filings with the SEC, which are accessible on the
SEC’s website at www.sec.gov. Except as required by law, Park
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20200918005558/en/
Ian Weissman Senior Vice President, Corporate
Strategy 571-302-5591 iweissman@pkhotelsandresorts.com
Park Hotels and Resorts (NYSE:PK)
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