Hilton Grand Vacations Successfully Reprices Term Loan B

Rhea-AI Summary

Hilton Grand Vacations Inc. (NYSE:HGV) has successfully repriced its existing $900 million Term Loan B, set to mature on Jan. 17, 2031. The new pricing is SOFR plus 225 basis points, reduced from the previous SOFR plus 275 basis points. This repricing is expected to generate nearly $4.5 million in annual savings for the company.

Dan Mathewes, president and CFO of Hilton Grand Vacations, expressed satisfaction with the company's execution and success in their capital markets platform, highlighting the reduction in spreads and borrowing costs despite a volatile market. The company also managed to expand its investor base through this process. Bank of America served as the lead arranger, while Simpson Thacher & Bartlett LLP represented HGV as issuer counsel.

Positive

• Successful repricing of $900 million Term Loan B
• Reduced interest rate from SOFR+275bps to SOFR+225bps
• Expected annual savings of $4.5 million
• Expanded investor base despite volatile market conditions

Negative

• None.

Financial Analyst

Hilton Grand Vacations' move to reprice its $900 million Term Loan B is significant. By reducing the interest rate spread from SOFR plus 275 basis points to SOFR plus 225 basis points, the company is effectively lowering its borrowing costs. This change translates to annual savings of approximately $4.5 million, which can be reinvested into the business or enhance profitability.

Short-term implications: The immediate reduction in interest expenses is beneficial for Hilton Grand Vacations, particularly in a volatile market. This cost-saving measure improves their net margins, which could be favorably received in the upcoming financial reports. Investors should expect a slightly better earnings per share (EPS) due to lower financing costs.

Long-term implications: Over the long term, lower borrowing costs position Hilton Grand Vacations favorably compared to competitors who may face higher financing expenses. This can lead to strategic advantages, such as more aggressive expansion plans or enhanced ability to weather economic downturns without sacrificing profitability. Investors should monitor how these savings are deployed and their impact on long-term growth strategies.

While repricing does not directly increase revenue, it improves the company's financial health and operational efficiency, which are key metrics for financial stability and investor confidence.

ORLANDO, Fla.--(BUSINESS WIRE)-- Hilton Grand Vacations Inc. (NYSE:HGV) announces today the successful re-pricing of its existing $900 million Term Loan B, maturing Jan. 17, 2031. The new pricing will be SOFR plus 225 basis points, down from SOFR plus 275 basis points.

“We’re pleased with our continued execution and success on our capital markets platform, further reducing our spreads and borrowing costs,” said Dan Mathewes, president and chief financial officer of Hilton Grand Vacations. “Despite a volatile market, we continued to expand our investor base and generate nearly $4.5 million in annual savings.”

Proceeds of the issuance, net of fees, were used to reprice the existing Term Loan B due 2031.

Bank of America served as lead arranger and Simpson Thacher & Bartlett LLP represented HGV as issuer counsel.

Important Notice

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements convey management’s expectations as to the future of HGV, and are based on management’s beliefs, expectations, assumptions and such plans, estimates, projections and other information available to management at the time HGV makes such statements. Forward-looking statements include all statements that are not historical facts, and may be identified by terminology such as the words “outlook,” “believe,” “expect,” “potential,” “goal,” “continues,” “may,” “will,” “should,” “could,” “would,” “seeks,” “approximately,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “future,” “guidance,” “target,” or the negative version of these words or other comparable words, although not all forward-looking statements may contain such words. The forward-looking statements contained in this press release include statements related to HGV’s revenues, earnings, taxes, cash flow and related financial and operating measures, and expectations with respect to future operating, financial and business performance and other anticipated future events and expectations that are not historical facts. HGV cautions you that our forward-looking statements involve known and unknown risks, uncertainties and other factors, including those that are beyond HGV’s control, which may cause the actual results, performance or achievements to be materially different from the future results. Any one or more of these risks or uncertainties could adversely impact HGV’s operations, revenue, operating profits and margins, key business operational metrics, financial condition or credit rating. For a more detailed discussion of these factors, see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in HGV’s most recent Annual Report on Form 10-K, which may be supplemented and updated by the risk factors in HGV’s quarterly reports, current reports and other filings HGV makes with the SEC. HGV’s forward-looking statements speak only as of the date of this communication or as of the date they are made. HGV disclaims any intent or obligation to update any “forward-looking statement” made in this communication to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

About Hilton Grand Vacations Inc.

Hilton Grand Vacations Inc. (NYSE:HGV) is recognized as a leading global timeshare company and is the exclusive vacation ownership partner of Hilton. With headquarters in Orlando, Florida, Hilton Grand Vacations develops, markets, and operates a system of brand-name, high-quality vacation ownership resorts in select vacation destinations. Hilton Grand Vacations has a reputation for delivering a consistently exceptional standard of service, and unforgettable vacation experiences for guests and more than 700,000 Club Members. Membership with the Company provides best-in-class programs, exclusive services and maximum flexibility for our Members around the world.

For more information, visit www.corporate.hgv.com. Follow us on Instagram, Facebook, LinkedIn, X (formerly Twitter), Pinterest and YouTube.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240716551908/en/

Investor Contact:

Mark Melnyk

407-613-3327

mark.melnyk@hgv.com

Media Contact:

Lauren George

407-613-8431

lauren.george@hgv.com

Source: Hilton Grand Vacations Inc.

FAQ

What is the new interest rate for Hilton Grand Vacations' (HGV) Term Loan B?

The new interest rate for Hilton Grand Vacations' (HGV) Term Loan B is SOFR plus 225 basis points, down from the previous rate of SOFR plus 275 basis points.

How much annual savings is HGV expected to generate from the Term Loan B repricing?

Hilton Grand Vacations (HGV) is expected to generate nearly $4.5 million in annual savings from the successful repricing of its Term Loan B.

When does Hilton Grand Vacations' (HGV) repriced Term Loan B mature?

Hilton Grand Vacations' (HGV) repriced Term Loan B is set to mature on January 17, 2031.

Who served as the lead arranger for HGV's Term Loan B repricing?

Bank of America served as the lead arranger for Hilton Grand Vacations' (HGV) Term Loan B repricing.