Hilton Grand Vacations Prices $900M Senior Secured Notes for Bluegreen Vacations Acquisition
Hilton Grand Vacations Inc. (NYSE:) has announced the pricing of a $900 million senior secured notes offering due 2032. The offering is directly linked to the company’s proposed acquisition of Bluegreen Vacations Holding Corporation (BVH), a deal that was announced on November 6, 2023, with a total consideration of approximately $1.5 billion.
Expected Closing Date for Hilton Grand Vacations’ $900 Million Notes Offering
The notes, which are set to mature on January 15, 2032, are expected to close on January 17, 2024, subject to customary closing conditions. This private offering is exempt from the registration requirements of the Securities Act of 1933.
Hilton Grand Vacations’ Private Offering Exempt from Securities Act Requirements
If the offering closes concurrently with the acquisition, the notes will be issued by Hilton Grand Vacations Borrower LLC and Hilton Grand Vacations Borrower Inc., rather than the escrow subsidiaries initially established for the transaction. However, if the offering does not close alongside the acquisition, the proceeds will be held in escrow until certain conditions are met. Once the acquisition is completed, the obligations under the notes will be assumed by the surviving issuers and guaranteed by Hilton Grand Vacations Inc. and certain of its subsidiaries.
Impact of Acquisition on Hilton Grand Vacations’ Notes Issuers and Guarantors
The proposed acquisition of Bluegreen Vacations will have an impact on the parties involved in the notes offering. If the offering closes in conjunction with the acquisition, Hilton Grand Vacations Borrower LLC and Hilton Grand Vacations Borrower Inc. will issue the notes. However, if the offering does not close alongside the acquisition, the obligations under the notes will still be assumed by the surviving issuers and guaranteed by Hilton Grand Vacations Inc. and certain subsidiaries. The completion of the acquisition will solidify these arrangements and ensure the ongoing financial support for the notes.
Use of Proceeds from Notes Offering for Bluegreen Vacations Acquisition
Hilton Grand Vacations has outlined its plans for utilizing the net proceeds from the notes offering. The funds will primarily be allocated to finance the acquisition of Bluegreen Vacations. In addition, some of the proceeds will go towards repaying certain outstanding indebtedness and covering related fees and expenses. This strategic allocation of the funds aims to support the smooth integration of Bluegreen Vacations into Hilton Grand Vacations, ensuring a successful acquisition process.
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Analyst comment
Overall, the news is positive for Hilton Grand Vacations as they are pricing a $900 million senior secured notes offering to finance their acquisition of Bluegreen Vacations. The expected closing date for the offering is January 17, 2024, subject to customary closing conditions. The proceeds from the offering will be used to finance the acquisition, repay debt, and cover related fees and expenses. This strategic allocation of funds supports the smooth integration of Bluegreen Vacations into Hilton Grand Vacations, indicating a successful acquisition process. As an analyst, it can be expected that the market will respond positively to this news, as it shows a strong financial move by Hilton Grand Vacations to expand their portfolio.
