Travel + Leisure Co. Completes $350 Million Term Securitization

Rhea-AI Summary

Travel + Leisure Co. (NYSE:TNL) has successfully completed a $350 million term securitization transaction with an overall weighted average coupon of 5.20% and a 98.00% advance rate. The transaction was executed through Sierra Timeshare 2025-1 Receivables Funding , an indirect subsidiary.

The securitization comprises:

• $171 million Class A Notes at 4.81% coupon
• $71 million Class B Notes at 5.10% coupon
• $71 million Class C Notes at 5.39% coupon
• $37 million Class D Notes at 6.86% coupon

CFO Mike Hug highlighted that this first term offering of 2025 demonstrates the company's strong business model despite market volatility, expressing confidence in continued strong free cash flow generation.

Positive

• Successful completion of $350M term securitization
• High advance rate of 98.00% indicates strong asset quality
• Terms comparable to previous transaction despite market volatility
• Expected to generate strong free cash flow

Negative

• Higher interest rates on notes ranging from 4.81% to 6.86%

Insights

Financial Analyst

Travel + Leisure's $350 million term securitization reflects strong market confidence in the company's timeshare receivables portfolio. The 98.00% advance rate is particularly impressive, indicating investors' high confidence in the quality of TNL's underlying assets despite the market volatility mentioned by management.

The 5.20% weighted average coupon rate is competitive in the current interest rate environment and aligns with their previous securitization terms. This consistency in financing costs is a positive signal about the stability of TNL's business model and credit profile.

The transaction's structure - with four tranches of notes carrying progressively higher interest rates reflecting their risk position - demonstrates sophisticated financial engineering that optimizes TNL's cost of capital. The Class A Notes ($171 million at 4.81%) secured the most favorable terms as expected for senior securities.

Importantly, this transaction strengthens TNL's liquidity position and financial flexibility without diluting shareholders. For a company in the capital-intensive vacation ownership industry, maintaining efficient access to the securitization market is important for sustainable growth and free cash flow generation.

The timing and successful execution of this first 2025 term offering position TNL well for continued financial operations with potentially stronger free cash flow that could support shareholder returns through dividends or share repurchases.

ORLANDO, Fla.--(BUSINESS WIRE)-- Travel + Leisure Co. (NYSE:TNL) announced today it completed a term securitization transaction involving the issuance of $350 million in principal amount of asset-backed notes with an overall weighted average coupon of 5.20%. The advance rate for this transaction was 98.00%.

“Our first term offering of 2025 demonstrates the strength of our business model, even during times of market volatility,” said Mike Hug, chief financial officer of Travel + Leisure Co. “We are pleased with the terms of the transaction, which are comparable to our previous term transaction, and give us confidence in our ability to continue to generate strong free cash flow.”

Sierra Timeshare 2025-1 Receivables Funding LLC issued $171 million of Class A Notes, $71 million of Class B Notes, $71 million of Class C Notes, and $37 million of Class D Notes. The Class A Notes have a coupon of 4.81%, the Class B Notes have a coupon of 5.10%, the Class C Notes have a coupon of 5.39%, and the Class D Notes have a coupon of 6.86%.

Sierra Timeshare 2025-1 Receivables Funding LLC is an indirect subsidiary of Travel + Leisure Co. The transaction was completed in reliance upon Rule 144A and Regulation S as a placement of securities not registered under the Securities Act of 1933, as amended, or any state securities law. All of such securities having been sold, this announcement of their sale appears as a matter of record only.

About Travel + Leisure Co.

Travel + Leisure Co. (NYSE:TNL) is the world’s leading vacation ownership and membership travel company, providing more than six million vacations to travelers every year. The company operates a portfolio of vacation ownership, travel club, and lifestyle travel brands designed to meet the needs of the modern leisure traveler, whether they’re traveling the world or staying a little closer to home. With hospitality and responsible tourism at its heart, the company’s 19,000 dedicated associates around the globe help the company achieve its mission to put the world on vacation. Learn more at travelandleisureco.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250319637716/en/

Investor Contact:

Kendrick Calilao

Investor Relations

(407) 626-4487

IR@travelandleisure.com

Media Contact:

Melissa Landy

Public Relations

(407) 341-5492

Melissa.Landy@travelandleisure.com

Source: Travel + Leisure Co.

FAQ

What is the total value and coupon rate of Travel + Leisure's (TNL) 2025-1 securitization?

Travel + Leisure completed a $350 million term securitization with an overall weighted average coupon of 5.20%.

How are the TNL securitization notes structured in terms of classes and rates?

The notes are structured in 4 classes: Class A ($171M at 4.81%), Class B ($71M at 5.10%), Class C ($71M at 5.39%), and Class D ($37M at 6.86%).

What is the advance rate for TNL's 2025-1 securitization transaction?

The advance rate for the securitization transaction is 98.00%.

How does TNL's 2025-1 securitization compare to their previous term transaction?

According to CFO Mike Hug, the terms are comparable to their previous term transaction.