Hyatt Announces Pricing of Public Offering of Senior Notes

Rhea-AI Summary

Hyatt Hotels (NYSE: H) has priced a public offering of senior notes totaling $600 million. The offering consists of $150 million in 5.250% senior notes due 2029 (additional to $450 million previously issued) and $450 million in 5.375% senior notes due 2031. The proceeds will be used to repay the company's 5.375% notes due 2025 and for general corporate purposes. The offering, managed by Wells Fargo Securities, Goldman Sachs, and Truist Securities, is expected to close on November 20, 2024.

Positive

• Strategic debt refinancing extends maturity profile
• Maintains same interest rate (5.375%) while extending debt maturity from 2025 to 2031

Negative

• Increases total debt by $150 million through additional 2029 notes issuance
• Slight increase in interest expense with new 2031 notes at 5.375%

Insights

Fixed Income Analyst

This debt refinancing move by Hyatt is strategically timed and structured. The company is issuing $600M in total new notes split between two tranches - $150M in 2029 notes at 5.25% and $450M in 2031 notes at 5.375%. The primary purpose is to refinance existing 5.375% notes due in 2025.

The pricing reflects current market conditions and Hyatt's credit profile. The slight step-up in rate for the longer-dated 2031 notes is reasonable given the extended duration. This refinancing eliminates near-term maturity risk and extends Hyatt's debt maturity profile, though at marginally higher rates than their maturing debt. The company's ability to access public debt markets demonstrates continued strong institutional confidence in their credit quality.

CHICAGO--(BUSINESS WIRE)-- Hyatt Hotels Corporation (“Hyatt” or the “Company”) (NYSE: H), a leading global hospitality company, announced today the pricing of its public offering of $150,000,000 aggregate principal amount of senior notes due 2029 (the “2029 Notes”), which will bear interest at a fixed annual rate of 5.250% and $450,000,000 aggregate principal amount of senior notes due 2031, which will bear interest at a fixed annual rate of 5.375%.

The 2029 Notes will be a further issuance of the Company’s 5.250% senior notes due 2029, of which $450 million aggregate principal amount was issued on June 17, 2024 (the “existing 2029 Notes”). The 2029 Notes will form a single series with the existing 2029 Notes and have the same terms, other than the initial offering price and the issue date. Following the completion of the offering, the Company will have $600,000,000 aggregate principal amount of 5.250% senior notes due 2029 outstanding.

The offering is expected to close on November 20, 2024, subject to customary closing conditions.

The Company intends to use the net proceeds of the offering to repay all of the Company’s 5.375% notes due 2025 at or prior to their maturity on April 23, 2025 (the “2025 Notes”) and for general corporate purposes, and to pay fees and expenses related to this offering.

Wells Fargo Securities, LLC, Goldman Sachs & Co. LLC and Truist Securities, Inc. are acting as representatives of the underwriters and joint book-running managers for the offering.

The offering is being made pursuant to a shelf registration statement on Form S-3, including a base prospectus, that was filed by the Company with the Securities and Exchange Commission (the “SEC”) and became automatically effective upon filing on August 30, 2023. A preliminary prospectus supplement and accompanying prospectus relating to and describing the terms of the offering was filed with the SEC and is available on the SEC’s website located at www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus relating to the securities being offered may also be obtained by contacting: Wells Fargo Securities, LLC at +1 800-645-3751, Goldman Sachs & Co. LLC at +1 866-471-2526, and Truist Securities, Inc. at +1 800-685-4786.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Hyatt Hotels Corporation

Hyatt Hotels Corporation, headquartered in Chicago, is a leading global hospitality company guided by its purpose – to care for people so they can be their best. As of September 30, 2024, the Company’s portfolio included more than 1,350 hotels and all-inclusive properties in 79 countries across six continents. The Company’s offering includes brands in the Timeless Collection, including Park Hyatt®, Grand Hyatt®, Hyatt Regency®, Hyatt®, Hyatt Vacation Club®, Hyatt Place®, Hyatt House®, Hyatt Studios, and UrCove; the Boundless Collection, including Miraval®, Alila®, Andaz®, Thompson Hotels®, Dream® Hotels, Hyatt Centric®, and Caption by Hyatt®; the Independent Collection, including The Unbound Collection by Hyatt®, Destination by Hyatt®, and JdV by Hyatt®; and the Inclusive Collection, including Impression by Secrets, Hyatt Ziva®, Hyatt Zilara®, Zoëtry® Wellness & Spa Resorts, Secrets® Resorts & Spas, Breathless Resorts & Spas®, Dreams® Resorts & Spas, Hyatt Vivid Hotels & Resorts, Alua Hotels & Resorts®, and Sunscape® Resorts & Spas. Subsidiaries of the Company operate the World of Hyatt® loyalty program, ALG Vacations®, Mr & Mrs Smith™, Unlimited Vacation Club®, Amstar DMC destination management services, and Trisept Solutions® technology services. For more information, please visit www.hyatt.com.

FORWARD-LOOKING STATEMENTS

Forward-Looking Statements in this press release, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements about the offering and the Company’s intended use of proceeds from the offering, the Company’s plans, strategies, outlook, financial performance, projections, financing proposals, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the rate and pace of economic recovery following economic downturns; global supply chain constraints and interruptions, rising costs of construction-related labor and materials, and increases in costs due to inflation or other factors that may not be fully offset by increases in revenues in our business; risks affecting the luxury, resort, and all-inclusive lodging segments; levels of spending in business, leisure, and group segments, as well as consumer confidence; declines in occupancy and average daily rate; limited visibility with respect to future bookings; loss of key personnel; domestic and international political and geo-political conditions, including political or civil unrest or changes in trade policy; hostilities, or fear of hostilities, including future terrorist attacks, that affect travel; travel-related accidents; natural or man-made disasters, weather and climate-related events, such as earthquakes, tsunamis, tornadoes, hurricanes, droughts, floods, wildfires, oil spills, nuclear incidents, and global outbreaks of pandemics or contagious diseases, or fear of such outbreaks; our ability to successfully achieve certain levels of operating profits at hotels that have performance tests or guarantees in favor of our third-party owners; the impact of hotel renovations and redevelopments; risks associated with our capital allocation plans, share repurchase program, and dividend payments, including a reduction in, or elimination or suspension of, repurchase activity or dividend payments; the seasonal and cyclical nature of the real estate and hospitality businesses; changes in distribution arrangements, such as through internet travel intermediaries; changes in the tastes and preferences of our customers; relationships with colleagues and labor unions and changes in labor laws; the financial condition of, and our relationships with, third-party owners, franchisees, and hospitality venture partners; the possible inability of third-party owners, franchisees, or development partners to access the capital necessary to fund current operations or implement our plans for growth; risks associated with potential acquisitions and dispositions and our ability to successfully integrate completed acquisitions with existing operations; failure to successfully complete proposed transactions (including the failure to satisfy closing conditions or obtain required approvals); our ability to successfully execute our strategy to expand our management and hotels services and franchising business; our ability to maintain effective internal control over financial reporting and disclosure controls and procedures; declines in the value of our real estate assets; unforeseen terminations of our management and hotels services or franchise agreements; changes in federal, state, local, or foreign tax law; increases in interest rates, wages, and other operating costs; foreign exchange rate fluctuations or currency restructurings; risks associated with the introduction of new brand concepts, including lack of acceptance of new brands or innovation; general volatility of the capital markets and our ability to access such markets; changes in the competitive environment in our industry, industry consolidation, and the markets where we operate; our ability to successfully grow the World of Hyatt loyalty program and Unlimited Vacation Club paid membership program; cyber incidents and information technology failures; outcomes of legal or administrative proceedings; and violations of regulations or laws related to our franchising business and licensing business and our international operations; and other risks discussed in the Company’s filings with the SEC, including our annual report on Form 10-K and quarterly reports on Form 10-Q, which filings are available from the SEC. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this press release. We do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

HHC-FIN

View source version on businesswire.com: https://www.businesswire.com/news/home/20241118531653/en/

Hyatt Media Contact:

Franziska Weber

franziska.weber@hyatt.com



Hyatt Investor Contacts:

Adam Rohman

adam.rohman@hyatt.com



Ryan Nuckols

ryan.nuckols@hyatt.com

Source: Hyatt Hotels Corporation

FAQ

What is the total value of Hyatt's (H) new senior notes offering in 2024?

Hyatt's new senior notes offering totals $600 million, comprising $150 million in 5.250% notes due 2029 and $450 million in 5.375% notes due 2031.

What are the interest rates for Hyatt's (H) new senior notes?

The 2029 notes bear interest at 5.250%, while the 2031 notes bear interest at 5.375%.

How will Hyatt (H) use the proceeds from its 2024 senior notes offering?

Hyatt will use the proceeds to repay its 5.375% notes due 2025 and for general corporate purposes, including offering-related fees and expenses.

When will Hyatt's (H) new senior notes offering close?

The senior notes offering is expected to close on November 20, 2024, subject to customary closing conditions.