Ryman Hospitality Properties, Inc. Announces Closing of $1.0 Billion of 6.500% Senior Notes Due 2032
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Insights
The completion of a $1.0 billion private placement of senior notes by Ryman Hospitality Properties is a significant financial event that warrants a detailed examination of its impact on the company's capital structure and liquidity. The 6.500% interest rate on these notes is notably higher than the rates on their existing notes due in 2027, 2028 and 2029, which could suggest a strategic move to lock in long-term financing in anticipation of rising interest rates or a reflection of the current credit market conditions.
From a liquidity perspective, the net proceeds of approximately $983 million will be used to prepay existing debt and reduce the company's leverage. This deleveraging could potentially improve the company's credit ratings and reduce future interest expenses, although it may also reduce financial flexibility. The decision to pay off the Second Amended and Restated Loan Agreement and a portion of the term loan B indicates a strategic preference for fixed-rate debt over variable-rate debt, which could protect the company against future interest rate volatility.
In the context of the hospitality industry, the use of proceeds to contribute to subsidiaries that own the Gaylord Rockies Resort & Convention Center demonstrates Ryman Hospitality's commitment to its core assets. This move can be seen as a vote of confidence in the long-term viability of the hospitality and convention sectors, which have been recovering from the downturn caused by the pandemic. However, the substantial investment in a single asset also concentrates the company's risk profile.
Assessing the market's response to this placement is important for understanding investor sentiment. The private nature of the offering, directed at qualified institutional buyers and non-U.S. persons, indicates that the company is seeking sophisticated investors who are comfortable with the associated risks. The exclusion of general public participation might be due to the regulatory complexities and the desire to expedite the process without the broader market scrutiny that public offerings entail.
The issuance of unregistered securities under Rule 144A and Regulation S suggests Ryman Hospitality is leveraging exemptions to streamline the capital-raising process. The use of these exemptions can be faster and less costly than a public offering, but it limits the pool of potential investors to those who meet specific criteria. It's important to note that these notes are senior unsecured obligations, which means they rank higher in the event of liquidation compared to subordinated debt but do not have collateral backing, potentially increasing the risk for investors.
The fact that the notes are guaranteed by the company and its subsidiaries that guarantee other existing credit facilities is a double-edged sword. It provides an additional layer of security for investors but also ties the financial health of the entire enterprise to these notes. This interconnectedness of obligations requires careful monitoring of the company's overall debt profile and the performance of the guarantors.
NASHVILLE, Tenn., March 28, 2024 (GLOBE NEWSWIRE) -- Ryman Hospitality Properties, Inc. (NYSE: RHP) (the “Company”) announced today that its subsidiaries, RHP Hotel Properties, LP (the “Operating Partnership”) and RHP Finance Corporation (together with the Operating Partnership, the “Issuers”), completed the previously announced private placement of
The Operating Partnership intends to contribute a portion of the net proceeds of this offering to its subsidiaries that own the Gaylord Rockies Resort & Convention Center, and such subsidiaries intend to use such net proceeds to prepay the indebtedness outstanding under the Second Amended and Restated Loan Agreement, dated as of July 2, 2019, with Wells Fargo Bank, National Association, as administrative agent, as amended from time to time, and to pay related fees and expenses. The Operating Partnership intends to use the remaining net proceeds, together with cash on hand, to repay, as soon as practicable, approximately
The Notes were offered only to persons reasonably believed to be qualified institutional buyers in compliance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act. The Notes were not registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About Ryman Hospitality Properties, Inc.
Ryman Hospitality Properties, Inc. (NYSE: RHP) is a leading lodging and hospitality real estate investment trust that specializes in upscale convention center resorts and entertainment experiences. RHP’s holdings include Gaylord Opryland Resort & Convention Center; Gaylord Palms Resort & Convention Center; Gaylord Texan Resort & Convention Center; Gaylord National Resort & Convention Center; and Gaylord Rockies Resort & Convention Center, five of the top ten largest non-gaming convention center hotels in the United States based on total indoor meeting space. The Company also owns the JW Marriott San Antonio Hill Country Resort & Spa and two ancillary hotels adjacent to our Gaylord Hotels properties. The Company’s hotel portfolio is managed by Marriott International and includes a combined total of 11,414 rooms as well as more than 3 million square feet of total indoor and outdoor meeting space in top convention and leisure destinations across the country. RHP also owns a
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements as to the Company’s beliefs and expectations of the outcome of future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Examples of these statements include, but are not limited to, statements regarding the intended use of the net proceeds from the offering of the Notes. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. Factors that could cause results to differ are described in the filings made from time to time by the Company with the SEC and include the risk factors and other risks and uncertainties described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and subsequent filings. Except as required by law, the Company does not undertake any obligation to release publicly any revisions to forward-looking statements made by it to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events.
| Investor Relations Contacts: | Media Contacts: |
| Mark Fioravanti, President and Chief Executive Officer | Shannon Sullivan, Vice President Corporate and Brand Communications |
| Ryman Hospitality Properties, Inc. | Ryman Hospitality Properties, Inc. |
| (615) 316-6588 | (615) 316-6725 |
| mfioravanti@rymanhp.com | ssullivan@rymanhp.com |
| ~or~ | ~or~ |
| Jennifer Hutcheson, Chief Financial Officer | Robert Winters |
| Ryman Hospitality Properties, Inc. | Alpha IR Group |
| (615) 316-6320 | (929) 266-6315 |
| jhutcheson@rymanhp.com | robert.winters@alpha-ir.com |
FAQ
What was the total amount of the senior notes issued by Ryman Hospitality Properties, Inc.?
What are the net proceeds expected from the sale of the notes?
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Who are the guarantors of the senior notes?
What is the intended use of the remaining net proceeds?
