TYSONS, Va.--(BUSINESS WIRE)--Park Hotels & Resorts Inc. (NYSE: PK) (“Park” or the “Company”) today announced that it has entered into amendments (the “Credit Amendments”) to its $1.0 billion fully drawn revolving credit facility (the “Revolving Credit Facility”), $700 million term loan and $670 million term loan. The Credit Amendments waive the existing quarterly-tested financial covenants through March 31, 2021 and extend the maturity of the Revolving Credit Facility to December 2021.
Key terms of the Credit Amendments include the following –
- Extension of the Revolving Credit Facility maturity date from December 2020 to December 2021.
- Waiver of the existing quarterly-tested financial covenants beginning in the second quarter of 2020 through the first quarter of 2021, unless earlier terminated by the Company at its discretion.
- Adjustment of certain financial covenants to revised levels for temporary periods commencing in the second fiscal quarter of 2021 once quarterly testing of financial covenants resumes.
- Addition of a requirement to maintain minimum liquidity of $200 million.
- Guarantees by certain Park-affiliated entities and pledges of equity interests in Park-affiliated entities owning certain unencumbered assets during the waiver period and until the ratio of net debt to EBITDA falls below 6.50x.
- Increase of the interest rate for each facility to the highest leverage-based margins for the duration of the waiver period.
- Addition of a LIBOR floor of 25 basis points to the variable interest rate calculation for both facilities.
- Addition of certain restrictions and covenants for the duration of the waiver period, including restrictions on dividend and distribution payments (subject to REIT requirements) and share repurchases and new covenants limiting the incurrence of additional indebtedness, asset sales, investments and discretionary capital expenditures (in each case subject to various exceptions) and requiring certain mandatory prepayments.
“We are pleased to have successfully amended our unsecured credit agreements during this unprecedented time,” said Thomas J. Baltimore, Jr., Chairman and CEO of Park. “With these changes, Park is well positioned to weather this difficult period for an extended period of time. We are very thankful to our valuable lending partners for their ongoing support and partnership.”
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 Park’s current expectations regarding the performance of its business, financial results, liquidity and capital resources, the effects of competition and the effects of future legislation or regulations, the expected completion of anticipated dispositions, the declaration and payment 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” 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 the Company’s control and which could materially affect its results of operations, financial condition, cash flows, performance or future achievements or events. Currently, one of the most significant factors is the potential adverse effect of COVID-19, on the Company’s financial condition, results of operations, cash flows and performance, its hotel management companies and its hotels’ tenants, and the global economy and financial markets. The extent to which COVID-19 impacts the Company, its hotel managers, tenants and guests at the Company’s hotels will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those 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 Park makes concerning risk and uncertainties in Item 1A: “Risk Factors” in Park’s Annual Report on Form 10-K for the year ended December 31, 2019, as such factors may be updated from time to time in Park’s filings with 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.
About Park Hotels & Resorts
Park Hotels & Resorts Inc. (NYSE: PK) is the second largest publicly traded lodging real estate investment trust with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Park’s portfolio currently consists of 60 premium-branded hotels and resorts with over 33,000 rooms located in prime U.S. markets with high barriers to entry. For additional information, please visit Park's website at www.pkhotelsandresorts.com.
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