Summary
Marriott International, Inc. filed an 8-K report on November 15, 2005, detailing the issuance of new debt securities. The company issued $427.2 million in aggregate principal amount of 5.81 percent Series G Notes due November 10, 2015. These new notes were issued in exchange for existing debt, specifically $203.3 million of 7 percent Series E Notes due January 15, 2008, and $223.9 million of 7-7/8 percent Series C Notes due September 15, 2009. This transaction effectively refinances a portion of Marriott's outstanding debt, lowering the coupon rate from existing notes (7% and 7-7/8%) to 5.81%. The issuance was conducted as a private placement, and Marriott entered into a registration rights agreement to facilitate the exchange of these privately placed notes for registered notes, or potentially a shelf registration for resale, within specific timeframes. Failure to meet these registration deadlines could trigger penalty interest rates on the new notes.
Key Highlights
- 1Issuance of $427.2 million in aggregate principal amount of 5.81% Series G Notes due 2015.
- 2The new notes were issued via an exchange offer for existing 7% Series E Notes and 7-7/8% Series C Notes.
- 3This refinancing strategy aims to reduce the company's overall interest expense by lowering coupon rates.
- 4The new notes are general unsecured obligations of Marriott.
- 5The issuance was a private placement, with a registration rights agreement in place for future registration.
- 6Penalties, in the form of additional interest, may apply if registration deadlines are missed.
- 7The registration rights agreement outlines specific dates for filing a registration statement for an exchange offer or a shelf registration.