NH Hotel Group successfully prices €115m of bonds in order to refinance existing debt on more favourable terms and extend its maturity profile

The rationale for this transaction is to proactively address the Group's upcoming maturities, extend the average life of its debt, reduce gross debt and lower borrowing costs
27 March 2017
Category: 
Press room
  • The Group has priced €115 million of senior secured bonds on the market by upsizing the bond issued in September 2016. The new upsized bonds have a coupon of 3.75% and are due in 2023 as the ones issued in September 2016; however, they were issued at a premium to par of 3.375%, implying a yield to maturity of  around 3%
  • Using the proceeds from this transaction, coupled with an additional cash contribution, NH Hotel Group will refinance €150 million of the bonds issued in 2013 with a coupon of 6.875% (significantly above the 3% yield to maturity of the bonds issued today), to extend its maturity profile and to reduce gross debt
  • The new issue, whose terms are more attractive relative to the bonds issued in 2013, is subject to the same regime as the bonds due 2023 issued last year; indeed the new bonds and the 2016 bonds are fungible and have been rolled into a single €400 million tranche
  • After the transaction announcement, the three rating agencies that cover the Company have maintained their credit ratings and Fitch has upgraded its outlook from “stable” to “positive”

 

NH Hotel Group has successfully priced new senior secured bonds on the market with the aim of extending the Company's debt maturity profile for the coming years, increase the average life of its debt, bringing down average borrowing costs and reducing gross debt.

Taking advantage of the Group's business and earnings momentum, coupled with a strong capital markets environment, the Company has opted strategically to refinance a portion of the bonds it issued in 2013 ahead of maturity by upsizing the issue carried out in September of last year.

Specifically, the Group has priced €115 million of additional bonds today. The terms of the new bonds, which carry a coupon of 3.75% and are due in 2023, are similar to those issued in 2016; indeed the two bond issues have been rolled into a single €400 million tranche. However, today's bonds were priced at premium to par of 3.375%, implying a yield to maturity of around 3%.

Thanks to this transaction, NH Hotel Group will refinance €150 million of bonds issued in 2013 at 6.875%, a coupon that is significantly higher than the effective rate on the bonds issued today, extend its debt maturity profile and reduce gross debt, using the proceeds from this new issue, with the remainder coming from cash on balance sheet.

Following the deal announcement, rating agencies such as Standard & Poor’s, Moody’s and Fitch reiterated both their recent corporate credit ratings as well as those assigned to the senior debt, that are two notches above corporate rating.

In the case of Fitch, the agency has upgraded today its outlook from “stable” to “positive” as a result of the Company’s enhanced results in 2016 and its perspectives of improvement in most markets in the upcoming years.

 

About NH Hotel Group

NH Hotel Group (www.nhhotelgroup.com) is a world-leading urban hotel operator and a consolidated multinational player. It operates close to 400 hotels and almost 60,000 rooms in 30 markets across Europe, the Americas, Africa and Asia, including top city destinations such as Amsterdam, Barcelona, Berlin, Bogota, Brussels, Buenos Aires, Düsseldorf, Frankfurt, London, Madrid, Mexico City, Milan, Munich, New York, Rome and Vienna.