Hilton to sell $1.5B in private debt offering

This marks the hotel chain's second major debt offering in two months

Published January 19, 2021 by Sydney Lake

While the hospitality industry continues to struggle amid the pandemic, McLean-based Hilton Worldwide Holdings Inc. announced Tuesday it will sell $1.5 billion in debt in a private offering to institutional buyers. 

This mark’s Hilton’s second major debt offering within the past couple of months. In November 2020, Hilton announced its $1.9 billion debt offering, from which proceeds will be used to redeem notes due in 2024 and 2025.

Through this offering, the hotelier will sell $1.5 billion of senior notes due in 2032. Hilton will use the proceeds to redeem all of its outstanding 5.125% senior notes due 2026, according to a company statement. 

In June 2020, Hilton announced it was laying off 2,100 corporate employees — more than 20% of its corporate workforce. 

“2020 was incredibly difficult for all of us at Hilton, on a professional and personal level,” Hilton President and CEO Christopher J. Nassetta said in a Jan. 6 statement. “We had to make really heartbreaking decisions about our team while navigating our business through an unprecedented standstill in global travel.”

Hilton will use the proceeds from the offering to redeem all of its outstanding 4.25% senior notes due in 2024 and use the remaining proceeds to redeem its outstanding 4.625% senior notes due in 2025, according to a company statement. 

Due to the economic crisis, Hilton’s first-quarter 2020 revenues dropped by $284 million compared with 2019, with decreases continuing through the second quarter of 2020. The company reported slight improvements during the third quarter of 2020, but still saw a net loss of $81 million when compared with 2019. The company’s fourth quarter 2020 financial statements have not yet been released.

“A vaccine — in addition to ongoing common-sense safety precautions — will help people feel more confident in traveling domestically and internationally,” Nassetta said in a statement. “That confidence is going to be key in building momentum in recovery around the world, and in keeping our team members safe as they continue to spread the light and warmth of hospitality.”

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