8-KMaterial AgreementsFinancial EventsExhibits & Filings

Hilton Worldwide Holdings Inc. 8-K Report, Material Agreement (Mar 27, 2024)

Filed March 27, 2024For Securities:HLT

Summary

Hilton Worldwide Holdings Inc. (HLT) announced a significant financing event through its indirect subsidiary, Hilton Domestic Operating Company Inc. This subsidiary has issued and sold a total of $1 billion in senior unsecured notes. Specifically, $550 million of 5.875% Senior Notes due 2029 and $450 million of 6.125% Senior Notes due 2032 were issued at par value. The proceeds from this debt offering are earmarked for general corporate purposes, which include repaying $200 million of existing indebtedness under their senior secured revolving credit facility and funding investments and acquisitions. The notes are guaranteed by Hilton Worldwide Parent LLC and Hilton Worldwide Holdings Inc., providing a strong backing for these new obligations. This move indicates a strategic financial maneuver to manage debt, optimize capital structure, and support future growth initiatives.

Key Highlights

  • 1Hilton Domestic Operating Company Inc. issued $1 billion in senior unsecured notes: $550 million of 5.875% Notes due 2029 and $450 million of 6.125% Notes due 2032.
  • 2The notes were issued at par value, meaning no discount or premium was applied.
  • 3Net proceeds will be used for general corporate purposes, including repayment of $200 million on the senior secured revolving credit facility and for investments/acquisitions.
  • 4The notes are guaranteed by Hilton Worldwide Parent LLC and Hilton Worldwide Holdings Inc., adding a layer of financial security.
  • 5The 2029 Notes carry a 5.875% annual interest rate and mature on April 1, 2029.
  • 6The 2032 Notes carry a 6.125% annual interest rate and mature on April 1, 2032.
  • 7The Indenture includes covenants that may restrict the ability of the Issuer and its restricted subsidiaries to incur certain secured indebtedness and engage in sale and lease-back transactions, among other things.

Frequently Asked Questions

The net proceeds from the issuance of these notes are intended for general corporate purposes. This includes the repayment of $200 million of indebtedness under the company's senior secured revolving credit facility and to fund investments and acquisitions, signaling a strategy to manage existing debt and finance future growth opportunities.

These notes are senior unsecured obligations of Hilton Domestic Operating Company Inc. They rank equally in right of payment with other existing and future senior indebtedness of the Issuer and are senior to any subordinated indebtedness.

The notes are guaranteed on a senior unsecured basis by Hilton Worldwide Parent LLC (the Issuer's direct parent) and Hilton Worldwide Holdings Inc. (the Company's immediate parent), as well as certain existing and future wholly-owned subsidiaries that guarantee other credit facilities.

There are two series of notes: $550 million of 5.875% Senior Notes due 2029, maturing April 1, 2029, and $450 million of 6.125% Senior Notes due 2032, maturing April 1, 2032. Both series were issued at par and bear interest semi-annually. The Indenture also contains provisions for optional redemption by the Issuer and a repurchase option for holders upon a change of control triggering event.