Wyndham Hotels launches $1.6 billion term B at Libor plus 200 bps

By Sara Rosenberg

New York, March 20 – Wyndham Hotels & Resorts Inc. launched on Tuesday its $1.6 billion seven-year covenant-light term loan B (Baa3/BBB-) with price talk of Libor plus 200 basis points with a 0% Libor floor and an original issue discount of 99.75, according to a market source.

The term loan has 101 soft call protection for six months, the source said.

Bank of America Merrill Lynch, Barclays, Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, Wells Fargo Securities LLC, SunTrust Robinson Humphrey Inc., Bank of Nova Scotia, MUFG and U.S. Bank are the lead arrangers on the deal.

Commitments are due at noon ET on March 28, the source added.

Proceeds will be used to help fund the acquisition of La Quinta Holdings Inc.’s hotel franchise and hotel management businesses for $1.95 billion in cash.

Under the agreement, stockholders of La Quinta will receive $8.40 per share in cash, about $1 billion in aggregate, and Wyndham will repay about $715 million of La Quinta debt net of cash and set aside a reserve of $240 million for estimated taxes expected to be incurred in connection with the taxable spinoff of La Quinta’s owned real estate assets into CorePoint Lodging Inc.

Closing is expected in the second quarter, subject to approval by La Quinta stockholders, regulatory and government approval and the satisfaction of other customary conditions.

Wyndham Hotels is a Parsippany, N.J.-based hotel franchisor.

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