Key terms of these credit amendments
Park Hotels & Resorts Inc. is a lodging real estate company. The Company has a portfolio of hotels and resorts. The Company operates through the ownership segment, which includes all of its hotel properties and other resorts. The Company’s portfolio consists of approximately 63 hotels and resorts in total with over 34,000 rooms located in all of the United States and international markets.
Its portfolio includes hotels in areas in the United States like the New York City, Washington, D.C., Chicago, San Francisco, and London; resorts in leisure destinations for a good holiday destination, including Hawaii, Orlando, and Key West, and a range of properties adjacent to gateway airports for easy access to these, such as Los Angeles International, Chicago O’Hare, Boston Logan and Miami Airport, and select suburban locations.
The Company’s brand affiliations include DoubleTree by Hilton, Embassy Suites by Hilton, Hampton by Hilton, Hilton Hotels & Resorts, Hilton Garden Inn, Curio – A Collection by Hilton, and Waldorf Astoria Hotels & Resorts. Recently NYSE: PK at https://www.webull.com/quote/nyse-pk announced that it has entered into amendments to its $1.0 billion fully drawn revolving credit facility, $700 million term loan, and $670 million term loan. The Credit Amendments waive the existing quarterly-tested financial covenants through March 31, 2021, and extend the maturity of the Revolving Credit Facility to December 2021.
- Key terms of these credit amendments include the following:
Extension of the Revolving Credit Facility maturity date from December 2020 to December 2021. Wavering of the existing quarterly-tested financial covenants beginning in the second quarter of 2020 through the first quarter of 2021, unless earlier terminated by the Company at its discretion. Adjustment of certain financial covenants to revised levels for temporary periods commencing in the second fiscal quarter of 2021 once quarterly testing of financial covenants resumes.
Addition of a requirement to maintain minimum liquidity of $200 million. Guarantees by certain Park-based entities and pledges of equity interests in debt to EBITDA falls below 6.50x. Increase the interest rate for each facility to the highest leverage-based margins for the duration of the waiver period. The addition of a LIBOR floor of 25 basis points to the variable interest rate calculation for both facilities.
Addition of certain restrictions and covenants for the duration of the waiver period, including restrictions on dividend and distribution payments and share repurchases and new covenants limiting the incurrence of additional indebtedness, asset sales, investments and discretionary capital expenditures, in each case subject to various exceptions and requiring certain mandatory prepayments. They have also successfully amended their unsecured credit agreements during this unprecedented time. You can learn more stock trading information if you do not know how to buy stocks. Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.