Travelodge indicates tranche sizes, guidance in £550 million equivalent two-part notes offering

By Paul A. Harris

Portland, Ore., April 21 – Travelodge Hotels Ltd. indicated tranche sizes and final guidance in its £550 million equivalent two-part offering of TVL Finance plc five-year senior secured notes, according to market sources.

The Rule 144A and Regulation S deal is expected to feature a £330 million tranche of fixed-rate notes with two years of call protection with final yield guidance of 10 5/8%, implying a 10¼% coupon and an issue price of 98.575. Initial yield talk was 10¾% to 11%.

The offering also is expected to feature a €250 million tranche of floating-rate notes with one year of call protection with final spread guidance of Euribor plus 550 basis points (on top of earlier talk) and final price guidance of 97.5 to 98, rich to initial price talk of 96 to 97.

The deal is set to price on Friday.

Goldman Sachs and Barclays are leading the notes sale.

The Thame, U.K.-based hospitality company plans to use the proceeds plus cash on hand to redeem its outstanding senior secured fixed- and floating-rate notes in their entirety and to indirectly repay a portion of capitalized interest on certain subordinated shareholder loans.

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