Hilton Hotels prices tenders for several notes series

By Jennifer Chiou

New York, Oct. 19 - Hilton Hotels Corp. said it determined pricing in the tender offers for its $400 million of 7 5/8% notes due May 15, 2008, $200 million of 7.2% notes due Dec. 15, 2009, $300 million of 8¼% notes due Feb. 15, 2011, $375 million of 7 5/8% notes due Dec. 1, 2012, $200 million of 7½% notes due Dec. 15, 2017 and 61.72 billion Chilean pesos of 7.43% Chilean inflation-indexed notes due 2009.

For each $1,000 principal amount, Hilton said it will pay $1,016.45 for the 7 5/8% notes due 2008, $1,058.53 for the 7.2% notes, $1,119.13 for the 8¼% notes, $1,141.54 for the 7 5/8% notes due 2012 and $1,201.50 for the 7½% notes.

The company said it determined the payouts using a fixed spread of 50 basis points and the 3¾% Treasury due May 15, 2008 for the 7 5/8% notes due 2008, the 3½% Treasury due Dec. 15, 2009 for the 7.2% notes, the 5% Treasury due Feb. 15, 2011 for the 8¼% notes, the 4% Treasury due Nov. 15, 2012 for the 7 5/8% notes due 2012 and the 8 7/8% Treasury due Aug. 15, 2017 for the 7½% notes.

Pricing was set at 11 a.m. ET on Oct. 19.

The payouts include consent payments of $30.00 per $1,000 principal amount of notes tendered by the consent deadline.

Holders will also receive accrued interest up to the payment date.

The expiration for the offers is 8 a.m. ET on Oct. 24, previously prolonged from 8 a.m. ET on Oct. 11. The consent deadline was 5 p.m. ET on Sept. 25.

On Oct. 10, the company extended the consent deadline in the tender offer for its $200 million of 8% quarterly interest bonds due 2031 to 5 p.m. ET on Oct. 16. The deadline was previously on Oct. 9 and before that on Oct. 1.

For each $25.00 principal amount of 8% bonds, the company will pay $25.25, up from $25.125. The payout includes a consent payment of $1.00 per bond.

The company previously said that it will likely call the 8% bonds at par if it does not receive the necessary consents.

As already reported, Hilton had said that the extension was made so the end of the tender will coincide with the effective date of its planned merger. The company is being acquired by BH Hotels LLC, which is controlled by investment funds affiliated with the Blackstone Group LP.

As of 5 p.m. ET on Oct. 4, Hilton had received tenders for $361.6 million, or 90.4%, of the 7 5/8% notes due 2008, $122.2 million, or 61.1%, of the 7.2% notes, $289.3 million, or 96.4%, of the 8¼% notes, $369.3 million, or 98.5%, of the 7 5/8% notes due 2012, $139.0 million, or 69.5%, of the 7½% notes, all of the 7.43% Chilean notes and $91.4 million, or 45.7%, of the 8% bonds.

As previously announced, Hilton has received the necessary consents to amend its 7.43% Chilean notes, 7 5/8% notes due 2008, 7.2% notes, 8¼% notes, 7 5/8% notes due 2012 and 7½% notes.

The company said that for securities for which it has received consents it expects to execute a supplemental indenture incorporating the changes promptly. They will go into effect when the company buys the bonds.

The company also said previously that, following discussions with investors, it amended the amount on offer for its 7.43% Chilean notes and extended the tender for those notes.

For the Chilean notes, the payment on offer will now be 65,560.95 pesos per 50,000 pesos original principal amount, converted into U.S. dollars at the exchange rate defined in the officers' certificate for the notes at 5 p.m. Santiago time on Oct. 22. The total includes a consent payment of 2,000 pesos per 50,000 pesos.

The original amount on offer for each 50,000 Chilean pesos original principal amount was $119.53, which represents a price of $1,028.72 per $1,000 adjusted principal amount converted at the observed exchange rate on Sept. 11.

Hilton announced the tender on Sept. 12 and the Beverly Hills, Calif., hospitality company said it was also soliciting consents to amend the note indentures to eliminate substantially all of the restrictive covenants, to eliminate certain events of default, to modify or eliminate covenants regarding consolidations, mergers and sale of assets and company reports and to modify or eliminate certain other provisions, including, without limitation, certain provisions relating to defeasance.

Bear, Stearns & Co. Inc. (877 696-BEAR or call collect 212 272-5112) and UBS Investment Bank (888 719-4210 or call collect 203 719-4210) are the dealer managers.

Banc of America Securities LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Inc. and Morgan Stanley & Co. Inc. are also acting as dealer managers and solicitation agents.

Global Bondholder Services Corp. (866 924-2200 or call collect 212 430-3774) is the information agent.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.