Travel + Leisure Co. Completes $375 Million Term Securitization

Rhea-AI Summary

Travel + Leisure Co. (NYSE:TNL) has successfully completed a $375 million term securitization transaction, issuing asset-backed notes with an overall weighted average coupon of 5.56%. The advance rate for this transaction was 96.00%. This marks the company's second term securitization of 2024, with improved interest rates and advance rates compared to their March 2024 transaction.

The securitization was structured as follows:

• $169 million of Class A Notes at 5.14% coupon
• $82 million of Class B Notes at 5.29% coupon
• $87 million of Class C Notes at 5.83% coupon
• $37 million of Class D Notes at 7.48% coupon

The transaction was completed under Rule 144A and Regulation S as a private placement.

Positive

• Successful completion of a $375 million term securitization
• Improved interest rates and advance rates compared to March 2024 transaction
• High advance rate of 96.00% achieved
• Overall weighted average coupon of 5.56%

Negative

• None.

Financial Analyst

Travel + Leisure Co.'s recent term securitization involving $375 million in asset-backed notes marks a significant financial maneuver. The weighted average coupon of 5.56% for these notes indicates a better-than-anticipated cost of capital. More importantly, the 96% advance rate is noteworthy as it shows robust confidence from investors in the underlying assets and the company’s financial health. This maneuver helps in refinancing existing debts or funding new projects without diluting equity, thus potentially benefiting shareholders.

Market Research Analyst

From a market perspective, the successful securitization reflects positively on Travel + Leisure Co.'s positioning and market confidence. The issuance of different classes of notes with varying coupon rates points to a well-diversified investor base. The improvement in interest rates and advance rates compared to their previous transaction in March 2024 suggests effective financial management and an appealing investment proposition. This could lead to a stronger market perception and potentially support a positive stock performance in the near term.

Legal Expert

Legally, the transaction was carried out under Rule 144A and Regulation S, indicating it was a private placement rather than a public offering. This can be beneficial in terms of regulatory compliance and speed of execution. By not registering under the Securities Act of 1933, Travel + Leisure Co. has potentially reduced the administrative burden and costs associated with public offerings. This strategic choice also suggests that the company has strong relationships with institutional investors who are comfortable with private placements, further underlining investor confidence.

ORLANDO, Fla.--(BUSINESS WIRE)-- Travel + Leisure Co. (NYSE:TNL) announced today it completed a term securitization transaction involving the issuance of $375 million in principal amount of asset-backed notes with an overall weighted average coupon of 5.56%. The advance rate for this transaction was 96.00%.

“We are very pleased with the successful completion of our second term securitization of 2024, with interest rate and advance rate improvements over our March 2024 transaction,” said Mike Hug, Chief Financial Officer of Travel + Leisure Co. “These terms reflect the market’s confidence in Travel + Leisure and the quality and dependability of our business.”

Sierra Timeshare 2024-2 Receivables Funding LLC issued $169 million of Class A Notes, $82 million of Class B Notes, $87 million of Class C Notes, and $37 million of Class D Notes. The Class A Notes have a coupon of 5.14%, the Class B Notes have a coupon of 5.29%, the Class C Notes have a coupon of 5.83%, and the Class D Notes have a coupon of 7.48%.

Sierra Timeshare 2024-2 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.

As the world’s leading membership and leisure travel company, Travel + Leisure Co. (NYSE:TNL) transformed the way families vacation with the introduction of the most dynamic points-based vacation ownership program at Club Wyndham, and the first vacation exchange network, RCI. The company delivers more than six million vacations each year at 270+ timeshare resorts worldwide, through tailored travel and membership products, and via Travel + Leisure GO - the signature subscription travel club inspired by the pages of Travel + Leisure magazine. With hospitality and responsible tourism at the heart of all we do, our 19,000+ dedicated associates bring out the best in people and places around the globe. We put the world on vacation. Learn more at travelandleisureco.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240722738583/en/

Investor Contact:

Jill Greer

Investor Relations

(407) 626-4050

IR@travelandleisure.com

Media Contact:

Steven Goldsmith

Public Relations

(407) 626-5882

Steven.Goldsmith@travelandleisure.com

Source: Travel + Leisure Co.

FAQ

What was the total amount of Travel + Leisure Co.'s (TNL) recent term securitization?

Travel + Leisure Co. (TNL) completed a $375 million term securitization transaction.

What was the overall weighted average coupon for TNL's 2024-2 securitization?

The overall weighted average coupon for the securitization was 5.56%.

How does TNL's 2024-2 securitization compare to their March 2024 transaction?

The 2024-2 securitization showed improvements in both interest rates and advance rates compared to the March 2024 transaction.

What was the advance rate for Travel + Leisure Co.'s (TNL) 2024-2 securitization?

The advance rate for the 2024-2 securitization was 96.00%.