8-KMaterial AgreementsExhibits & Filings

Hilton Worldwide Holdings Inc. 8-K Report, Material Agreement (Jun 14, 2024)

Filed June 14, 2024For Securities:HLT

Summary

Hilton Worldwide Holdings Inc. (HLT) announced a significant amendment to its credit agreement through its indirect subsidiary, Hilton Domestic Operating Company Inc. This filing details Amendment No. 11, which restructures the company's term B-4 loans. Notably, the company has repaid approximately $1,000 million of term B-3 loans and replaced them with new term B-4 loans, resulting in approximately $3,119 million in outstanding term B-4 loans. The amendment also includes a reduced applicable margin on both Term SOFR rate and base rate loans, indicating a favorable repricing for the company. While beneficial for Hilton, the amendment includes a 1.00% prepayment premium for repricing within six months, a standard provision to protect lenders from immediate refinancing risks.

Key Highlights

  • 1Hilton Domestic Operating Company Inc. entered into Amendment No. 11 to its Credit Agreement.
  • 2Approximately $1,000 million of term B-3 loans were repaid.
  • 3New term B-4 loans will total approximately $3,119 million after the transaction.
  • 4The amendment reduces the applicable margin on Term SOFR rate loans to 1.75% per annum.
  • 5The amendment reduces the applicable margin on base rate loans to 0.75% per annum.
  • 6The credit spread adjustment for Term SOFR rate loans has been removed.
  • 7A 1.00% prepayment premium applies to certain repricing transactions within six months of the amendment's effective date.

Frequently Asked Questions

The primary purpose of Amendment No. 11 is to restructure Hilton's existing term B-4 loans. This involves repaying approximately $1,000 million of term B-3 loans and refinancing them with new term B-4 loans, which carry improved terms for the company.

The amendment benefits Hilton financially through a reduction in its borrowing costs. The applicable margin on Term SOFR rate loans has been lowered to 1.75% and on base rate loans to 0.75%. Additionally, the removal of the credit spread adjustment for Term SOFR loans further reduces interest expenses.

Yes, the amendment includes a 1.00% prepayment premium on the aggregate principal amount of any Repriced Term Loans prepaid as a result of certain repricing transactions occurring within six months of the amendment's effective date. This is a common feature to compensate lenders for potential reinvestment risk.

Following the repayment of term B-3 loans and the issuance of new term B-4 loans, the aggregate principal amount of outstanding term B-4 loans will be approximately $3,119 million.