Park Hotels & Resorts Announces Final Results of Tender Offer

Rhea-AI Summary

Park Hotels & Resorts (NYSE: PK) announced the final results of their Tender Offer for all outstanding 7.500% Senior Notes due 2025. The offer expired on May 13, 2024. On May 16, 2024, the company purchased $311,473,000 in principal amount of these Notes. Additionally, Park issued a notice of redemption for the remaining Notes, effective June 1, 2024, at a redemption price of 100% of the principal plus accrued interest. Following this redemption, no Notes will remain outstanding. Wells Fargo Securities acted as Dealer Manager for the Tender Offer.

Positive

• Park Hotels & Resorts successfully purchased $311,473,000 in principal amount of the Notes.
• Park issued a notice of redemption for all outstanding Notes, clearing them by June 1, 2024.
• The redemption price is set at 100% of the principal amount plus accrued interest.

Negative

• The cost associated with the Tender Offer and redemption could impact Park's liquidity and cash reserves.
• A significant portion of $650 million in Notes remains to be redeemed, which could strain financial resources.

Insights

Financial Analyst

The recent completion of Park Hotels & Resorts' tender offer for its outstanding 7.500% Senior Notes due 2025 has significant implications for the company's financial health and liquidity management. By purchasing $311,473,000 of the outstanding $650,000,000 principal amount of these notes, Park has effectively reduced its debt burden. This move shows proactive debt management, which can help improve the company's balance sheet and potentially enhance its credit ratings. Reducing high-interest debt is generally seen as a positive move for stakeholders, as it decreases the company's interest expenses and improves net income. However, investors should monitor how Park plans to utilize its improved liquidity. The upcoming redemption of the remaining notes further underscores the company's commitment to deleveraging, which could be favorable in the long term.

Market Research Analyst

The move by Park Hotels & Resorts to buy back a substantial portion of its high-yield notes should be seen in the context of broader market trends. The hospitality sector has been recovering from the impact of the pandemic and companies within this space are focusing on strengthening their financial positions. By reducing its debt, Park is positioning itself to be more financially flexible, which is critical as it navigates a market still marked by some unpredictability. This strategic decision could potentially make Park more attractive to investors looking for stability in a sector known for its cyclical nature. Additionally, the company's large portfolio of premium-branded hotels and resorts may now have an improved financial foundation to leverage for growth opportunities in the future.

TYSONS, Va., May 16, 2024 (GLOBE NEWSWIRE) -- Park Hotels & Resorts Inc. (“Park”) (NYSE: PK) announced today the expiration of and the final results for the previously announced offer to purchase for cash (the “Tender Offer”) commenced by Park’s subsidiaries, Park Intermediate Holdings LLC, a Delaware limited liability (the “Company”), PK Domestic Property LLC, a Delaware limited liability company, and PK Finance Co-Issuer Inc., a Delaware corporation (collectively, the “Issuers”), for any and all of their outstanding 7.500% Senior Notes due 2025 (the “Notes”). The Tender Offer expired at 5:00 p.m., New York City time, on May 13, 2024 (the “Expiration Time”).

On May 16, 2024, the Issuers purchased $311,473,000 in principal amount of the Notes that were validly tendered and not validly withdrawn or with respect to which a properly completed and duly executed Notice of Guaranteed Delivery was delivered at or prior to the Expiration Time.

According to information received from Global Bondholder Services Corporation, the Tender and Information Agent for the Tender Offer, the following table sets forth details regarding the total aggregate principal amount of the Notes validly tendered and not validly withdrawn or with respect to which a properly completed and duly executed Notice of Guaranteed Delivery was delivered at or prior to the Expiration Time and the principal amount of the Notes that will be accepted for purchase by the Issuers today:

Title of Security		CUSIP Numbers/ISINs:		Principal Amount Outstanding			Principal Amount Tendered			Principal Amount to be Accepted on 5/16/2024
7.500% Senior Notes due 2025		144A: 70052LAA1 / US70052LAA17 Reg S: U7013LAA8 / USU7013LAA80		$650,000,000			$311,473,000			$311,473,000

In addition, on May 16, 2024, the Issuers issued a notice of redemption for all of the Notes outstanding following the settlement of the Tender Offer at a redemption price of 100.000% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the redemption date (which is expected to be June 1, 2024) pursuant to the terms of the indenture governing the Notes. Following the redemption on the redemption date, the Issuers will no longer have any Notes outstanding.

Wells Fargo Securities, LLC served as Dealer Manager for the Tender Offer. Global Bondholder Services Corporation served as the Tender and Information Agent for the Tender Offer. Questions regarding the Tender Offer may be directed to Wells Fargo Securities, LLC at 550 South Tryon Street, 5th Floor, Charlotte, North Carolina 28202, Attn: Liability Management Group, (866) 309-6316 (toll-free), (704) 410-4759 (collect) or by email to liabilitymanagement@wellsfargo.com.

This press release is for informational purposes only and does not constitute an offer to purchase or the solicitation of an offer to sell any securities, including the Notes.

About Park Hotels & Resorts
Park is one of the largest publicly traded lodging REITs, with a diverse portfolio of iconic and market-leading hotels and resorts with significant underlying real estate value. Park’s portfolio currently consists of 43 premium-branded hotels and resorts with over 26,000 rooms located in prime city center and resort locations.

Forward Looking Statements
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 include, but are not limited to, statements related to the effects of Park’s decision to cease payments on its $725 million non-recourse CMBS loan secured by the 1,921-room Hilton San Francisco Union Square and the 1,024-room Parc 55 San Francisco – a Hilton Hotel and the lender’s exercise of its remedies, including placing such hotels into receivership, as well as Park’s current expectations regarding the performance of its business, financial results, liquidity and capital resources, including anticipated repayment of certain of its indebtedness (including the Notes), the completion of capital allocation priorities, the expected repurchase of Park’s stock, the impact from macroeconomic factors (including inflation, elevated interest rates, potential economic slowdown or a recession and geopolitical conflicts), the effects of competition, the effects of future legislation or regulations, the expected completion of anticipated dispositions, the declaration, payment and any change in amounts of future dividends and other non-historical statements. Forward-looking statements include all statements that are not historical facts, and in some cases, can be identified by the use of forward-looking terminology such as the words “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “hopes” or the negative version of these words or other comparable words. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond Park’s control and which could materially affect its results of operations, financial condition, cash flows, performance or future achievements or events.

All such forward-looking statements are based on current expectations of management and therefore involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in these forward-looking statements. You should not put undue reliance on any forward-looking statements and Park urges investors to carefully review the disclosures it makes concerning risks and uncertainties under “Risk Factors” and in Park’s Annual Report on Form 10-K for the year ended December 31, 2023, as such factors may be updated from time to time in its periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. Except as required by law, Park undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

For more information, contact:
Ian Weissman
Senior Vice President, Corporate Strategy
571-302-5591
iweissman@pkhotelsandresorts.com

FAQ

What is the final result of Park Hotels & Resorts' Tender Offer?

Park Hotels & Resorts purchased $311,473,000 in principal amount of the 7.500% Senior Notes due 2025.

When did the Tender Offer by Park Hotels & Resorts expire?

The Tender Offer expired at 5:00 p.m., New York City time, on May 13, 2024.

What is the total principal amount of Notes tendered in Park Hotels & Resorts' offer?

The total principal amount of Notes tendered was $311,473,000.

When is Park Hotels & Resorts redeeming the remaining Notes?

Park Hotels & Resorts will redeem the remaining Notes on June 1, 2024.

What is the redemption price for the remaining Notes by Park Hotels & Resorts?

The redemption price is 100% of the principal amount plus accrued interest.

Who managed Park Hotels & Resorts' Tender Offer?

Wells Fargo Securities served as the Dealer Manager for Park Hotels & Resorts' Tender Offer.