PARSIPPANY, N.J. - Wyndham Hotels & Resorts, Inc. (NYSE: WH), the world's largest hotel franchising company, has announced the successful repricing of its Senior Secured Term Loan B Facility, now totaling $1.5 billion and maturing in May 2030. This transaction, completed today, resulted in a lower interest rate and increased the facility by $400 million due to strong investor demand.
The repriced Term Loan B, initially $1.1 billion, now bears interest at SOFR plus 1.75%, a decrease of 60 basis points. The issue price was 99.875%, marking a significant achievement as the tightest priced new money raise since the adoption of SOFR. The company anticipates that this repricing will save approximately $6 million in annual interest expenses. The terms, including maturities and covenants, remain unchanged for the combined facility.
Michele Allen, Wyndham's Chief Financial Officer and Head of Strategy, attributed the successful repricing and upsizing to the company's strong performance over the past year, highlighting the confidence investors have in its asset-light, cash-generative business model. The new funds are earmarked for general corporate purposes, including repaying outstanding balances on Wyndham's revolving credit facility.
Wells Fargo Securities, LLC led the arrangement, with Deutsche Bank Securities Inc., JPMorgan Chase (NYSE:JPM) Bank, N.A., BofA Securities, Inc., Barclays Bank PLC, U.S. Bank National Association, The Bank of Nova Scotia, and Truist Securities, Inc. serving as joint bookrunners.
Wyndham Hotels & Resorts operates approximately 9,200 hotels and boasts over 876,000 rooms worldwide, catering to the everyday traveler through its portfolio of 25 brands. The company also runs the Wyndham Rewards loyalty program, which has around 108 million enrolled members.
InvestingPro Insights
Wyndham Hotels & Resorts' strategic financial maneuvering, as evidenced by the recent repricing of its Senior Secured Term Loan B Facility, is underscored by its solid financial metrics and market position. According to InvestingPro data, Wyndham, with a market cap of $5.67 billion, maintains a healthy gross profit margin of 67.46% over the last twelve months as of Q1 2024, indicative of its strong pricing power and cost management capabilities.
Investors may also be encouraged by Wyndham's commitment to shareholder returns. An InvestingPro Tip highlights that Wyndham has raised its dividend for three consecutive years, with a dividend growth of 8.57% over the last twelve months as of Q1 2024. The company's current dividend yield stands at 2.16%, offering investors a steady income stream.
Additionally, the company's management has demonstrated confidence in its stock, as another InvestingPro Tip reveals that management has been aggressively buying back shares. This could signal a belief in the company's undervalued stock price and a long-term commitment to enhancing shareholder value.
For those looking to delve deeper into Wyndham's financial health and future prospects, InvestingPro provides even more insights. There are additional InvestingPro Tips available, which can be accessed at https://www.investing.com/pro/WH. Readers interested in these expert analyses can use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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