Summary
Marriott International, Inc. (MAR) announced on June 10, 2016, the successful closing of a significant debt offering, raising approximately $1.48 billion in net proceeds. This capital was raised through the issuance of two tranches of notes: $750 million aggregate principal amount of 2.300% Series Q Notes due 2022 and $750 million aggregate principal amount of 3.125% Series R Notes due 2026. The primary purpose of this financing is to fund the cash consideration and related expenses for the previously announced acquisition of Starwood. This move underscores Marriott's strategic focus on growth and integration, with the proceeds earmarked for the Starwood combination or, alternatively, for general corporate purposes including working capital, capital expenditures, acquisitions, stock repurchases, or debt repayment if the Starwood deal does not materialize.
Key Highlights
- 1Marriott International successfully raised $1.48 billion in net proceeds from a debt offering.
- 2The offering consisted of $750 million in 2.300% Series Q Notes due 2022 and $750 million in 3.125% Series R Notes due 2026.
- 3The funds are primarily intended to finance the cash portion of the Starwood acquisition and associated costs.
- 4The debt was issued under Marriott's existing indenture dated November 16, 1998.
- 5The company has the option to redeem the notes, in whole or in part, under specified terms.
- 6If the Starwood acquisition is not completed, proceeds may be used for general corporate purposes, indicating financial flexibility.
- 7The filing includes various exhibits related to the Terms Agreement, the Notes, legal opinions, and consents.