Hilton clinches deal to reduce debt by nearly $4b

09 April 2010 by
Hilton clinches deal to reduce debt by nearly $4b

Hilton Worldwide has completed a deal to reduce its debt by almost $4b and extend the maturity by two years.

The move, which extends the maturity until November 2015, reduces the Blackstone-owned company's total debt by nearly $4b (£2.6b) to $16b (£10.4b).

The transaction was effected through the purchase and retirement of $1.8b (£1.17b) of debt and the conversion of $2.1b (£1.36b) of "junior mezzanine" debt to "preferred equity".

Mezzanine debt ranks after other debts should a company fall into receivership or be closed. The loans, also known as subordinated loans, typically have a higher rate of interest than senior debt due to the increased inherent risk.

Preferred equity only takes into account the preferred stockholders, and disregards the common stockholders. It is equal to shareholders' equity minus common equity.

Blackstone, the world's largest private-equity firm, bought Hilton in 2007 when the property market was at its peak and was believed to have been negotiating with lenders to cut the hotel chain's debt by about $5b (£3.25b).

Christopher Nassetta, president and chief executive of Hilton Worldwide, said: "This debt restructuring is another important step forward for the company, and I would like to thank all of our lenders as well as our investors, led by Blackstone, for their tremendous efforts in completing this transaction."

Nassetta said Hilton Worldwide was now "positioned very well" to capitalise on the recovery in the hospitality industry.

Blackstone denies Hilton split rumours >>

Blackstone writes down nearly half its investment in Hilton >>

Blackstone completes Hilton Hotels Corporation takeover >>

By Daniel Thomas

E-mail your comments to Caterer News here.

If you have something to say on this story or anything else join the debate at Table Talk - Caterer's new networking forum. Go to www.caterersearch.com/tabletalk

Caterersearch.com jobs
Looking for a new job? Find your next hotel job here with Caterersearch.com jobs

Blogs on Caterersearch.com](http://www.caterersearch.com/blogs) Catch up with more news and gossip on all Caterer's blogs
[Newsletters For the latest hospitality news, sign up for our e-mail newsletters.
TagsFinance and Hotels
The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.


Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking