Summary
Hilton Worldwide Holdings Inc. (HLT) announced on October 7, 2016, the closing of a $725.0 million commercial mortgage-backed securities (CMBS) loan. This loan, obtained by two wholly owned subsidiaries, S.F. Hilton LLC and P55 Hotel Owner LLC, is secured by the Hilton San Francisco Union Square and the Parc 55 Hotel San Francisco. The loan carries a fixed interest rate of 4.1145% and a seven-year term with no amortization. The proceeds from this new CMBS loan were used to repay existing debt secured by the Hilton San Francisco Union Square and to prepay a portion of Hilton's existing $3.5 billion commercial mortgage-backed securities loan. This transaction signifies a strategic move to refinance existing debt at potentially more favorable terms and manage the company's capital structure.
Key Highlights
- 1Hilton Worldwide Holdings Inc. closed on a $725.0 million CMBS loan.
- 2The loan is secured by two San Francisco properties: Hilton San Francisco Union Square and Parc 55 Hotel San Francisco.
- 3The loan has a seven-year term and a fixed interest rate of 4.1145%.
- 4No amortization payments are required for this loan.
- 5Proceeds were used to repay debt on one of the secured hotels and to prepay existing $3.5 billion CMBS debt.
- 6The loan is with a syndicate of major banks including JPMorgan Chase Bank, Deutsche Bank, Goldman Sachs Mortgage Company, Barclays Bank PLC, and Morgan Stanley Bank, N.A.
- 7Certain obligations are guaranteed by Park Intermediate Holdings LLC, a subsidiary, with a limited recourse provision in case of borrower bankruptcy.