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Hilton Grand Vacation amends credit agreement covenants, pricing
By Rebecca Melvin
New York, March 26 – Hilton Grand Vacations Parent LLC, Hilton Grand Vacations Borrower LLC, Hilton Grand Vacations Inc. and some other subsidiaries entered into a fourth amendment of their credit agreement with Bank of America, NA as administrative agent, collateral agent, swingline lender and letter-of-credit issuer, according to an 8-K filed with the Securities and Exchange Commission.
The March 19 amendment will modify the credit agreement’s existing debt, lien and investment covenants to permit Hilton’s acquisition of Dakota Holdings Inc. and the related incurrence of debt, including a new $1.3 billion senior secured term loan and a new $675.0 million senior unsecured bridge loan and/or senior unsecured notes.
Some baskets and ratios under the credit agreement will be increased, and the minimum liquidity covenant in the agreement increases to $250 million from $175 million. Financial covenants will be amended to provide greater flexibility, and these changes go into effect upon consummation of the planned merger.
Pricing on the credit facility is Libor plus 175 basis points, a 25-bps increase from pre-amendment pricing, until the borrower has delivered the financial statements for the fiscal quarter ended on March 31. After that, pricing will be based on first-lien net leverage and will range from Libor plus 175 bps to Libor plus 350 bps. There is a 0.25% Libor floor.
The latest amendment to the company’s Dec. 28, 2016 credit agreement follows a first amendment on Nov. 18, 2018, a second amendment on May 8, 2020 and a third amendment on Dec. 10, 2020.
Hilton Grand Vacations is an Orlando, Fla.-based timeshare company.
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