Latham & Watkins Advises Hyatt Hotels in a US$2.9 Billion Bank and Bond Financing

Latham & Watkins represented Hyatt Hotels Corporation, the global hospitality company, in a bank and bond financing intended to enhance the company’s cash position and supplement its ability to address working capital requirements.

The bank financing involved a US$1.5 billion revolving credit facility and a 364-day US$500 million delayed draw bridge term loan, each secured by a first-priority interest in capital stock and assets of certain of Hyatt’s subsidiaries. The bank facilities provided for the automatic release of the collateral arrangements as well as the fall-away of certain requirements under the revolver simultaneously with the termination of the bridge loan.

Concurrently with the completion of the bank financing, Hyatt issued an aggregate of US$900 million of 5.375% five-year and 5.750% ten-year unsecured senior notes in a public offering. The notes were rated Baa3 by Moody’s and BBB- by Standard & Poor’s. Simultaneously with the completion of the bond offering, Hyatt terminated the bridge loan and triggered the release and fall-away provisions under the bank facilities.

Latham harnessed an interdisciplinary team, including from its market-leading Finance, Capital Markets and Real Estate Practices, as well as its Hospitality, Gaming & Leisure Industry Group, to advise Hyatt in the transaction. Finance counsel Cindy Caillavet and Corporate partners Michael Pucker, Cathy Birkeland and Roderick Branch led the Latham deal team. Associates Jennifer Hou Hirst, Jonathan Sarna, Nicole Stauffer, Kenneth (KC) Sands, Sara Mykrantz, Samantha Jackson, Hye Lee and Edwin Abundis supported the transaction. Advice was also provided on investment fund matters by Corporate partner Nabil Sabki, with associate Daniel Filstrup; on real estate matters by Corporate partner Robert Buday, with associate Karen Ritter; and on tax matters by Tax partners Diana Doyle and Rene De Vera, with associate Christopher Ohlgart.