Summary
Hilton Worldwide Holdings Inc. (HLT) announced a significant amendment to its senior secured revolving credit facility through Amendment No. 5 to its Credit Agreement. This amendment, entered into on June 5, 2019, by its indirect subsidiary Hilton Worldwide Finance LLC, demonstrates a strengthening of the company's financial flexibility and access to capital. The key changes involve a substantial increase in the revolving credit facility commitment from $1.0 billion to $1.75 billion, coupled with an extension of the maturity date to June 5, 2024. These adjustments provide Hilton with greater resources for operational needs, potential growth initiatives, and an extended runway for financial planning. The amendment also clarifies financial covenants, ensuring continued access to credit while maintaining a healthy leverage ratio.
Key Highlights
- 1Revolving credit facility commitments increased from $1.0 billion to $1.75 billion.
- 2Maturity date of the revolving credit facility extended to June 5, 2024.
- 3Letter of credit facility sublimit increased from $150.0 million to $250.0 million.
- 4Swing line facility sublimit increased from $50.0 million to $100.0 million.
- 5Applicable margins on loans adjusted with potential step downs/ups based on first lien net leverage ratios.
- 6Consolidated secured net leverage ratio covenant requirement not to exceed 5.00 to 1.00.
- 7Financial covenant testing will occur regardless of the amount of revolving credit facility utilization.