Hilton to sell $1.9B in debt in private offering
McLean hotelier continues to see significant revenue drops
As hotel industry revenues continue plummeting, McLean-based Hilton Worldwide Holdings Inc. announced this week it will sell $1.9 billion in debt in a private offering to institutional buyers.
The hotelier will sell $800 million of senior notes (due in 2029) at a 3.75% interest rate and an additional $1.1 billion at a 4% rate. Those will be due in 2031.
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.
Hilton, like other hotel companies, has struggled since the onset of the pandemic. In June, Hilton announced it was laying off 2,100 corporate employees — more than 20% of its corporate workforce. Due to the economic crisis, Hilton’s first-quarter revenues dropped by $284 million compared with 2019, with decreases continuing through the second quarter. The company reported slight improvements during the third quarter, but still saw a net loss of $81 million when compared with last year.
“While a full recovery will take time, we are well-positioned to capture rising demand and execute on growth opportunities,” Hilton President and CEO Christopher J. Nassetta, Virginia’s highest-earning CEO in 2019, said in a Nov. 4 statement. Nassetta brought home $21.37 million in total compensation, while Hilton’s 2019 median pay for employees was $43,695.
The senior note offerings are expected to close on Dec. 1, according to Hilton.