By Paul A. Harris
Portland, Ore., May 11 – Park Hotels & Resorts Inc. priced an upsized $750 million issue of eight-year senior secured notes (B+) at par to yield 4 7/8% in a Tuesday drive-by, according to market sources.
The issue size increased from $650 million.
The yield came at the tight end of yield talk in the 5% area. Initial guidance was 5% to 5¼%.
The deal played to $2.68 billion of demand across 110 accounts, according to a trader, who spotted the notes trading at par ¾ bid, 101¼ offered at Tuesday's close.
J.P. Morgan Securities LLC was at the left of a syndicate of bookrunners that also included BofA Securities Inc., Wells Fargo Securities LLC, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, Barclays, Jefferies LLC and Truist Securities Inc.
The Tysons, Va.-based real estate investment trust issued the notes via its subsidiaries Park Intermediate Holdings LLC, the operating company, as well as PK Domestic Property LLC and PK Finance Co-Issuer Inc.
Proceeds will be used to pay down Park Hotels & Resorts' revolver, and the term loan it entered into in 2019, which matures in August 2024.
Park Hotels & Resorts, which was spun off from Hilton Worldwide in 2017, focuses on hotel properties.
| Issuers: | Park Intermediate Holdings LLC, the operating company, as well as PK Domestic Property LLC and PK Finance Co-Issuer Inc.
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| Amount: | $750 million, increased from $650 million
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| Maturity: | May 15, 2029
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| Securities: | Senior secured notes
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| Joint bookrunners: | J.P. Morgan Securities LLC, BofA Securities Inc., Wells Fargo Securities LLC, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, Barclays, Jefferies LLC and Truist Securities Inc.
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| Coupon: | 4 7/8%
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| Price: | Par
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| Yield: | 4 7/8%
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| Spread: | 346 bps
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| Call protection: | Three years
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| Trade date: | May 11
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| Settlement date: | May 14
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| Rating: | S&P: B+
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 5% area
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| Marketing: | Drive-by
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