August 14, 2013 / 9:12 PM / 6 years ago

Hilton Worldwide sets $12 billion refi package ahead of IPO: RLPC

NEW YORK (Reuters) - Hilton Worldwide Inc is preparing a $12 billion debt financing package to refinance existing debt ahead of an initial public offering expected in the first half of 2014, sources told Thomson Reuters LPC.

The refinancing is expected to be launched for syndication after the Labor Day holiday, banking sources said.

The financing package will include $5 billion to $6 billion in covenant-lite leveraged loans. The rest of the financing will be a mix of high yield bonds, commercial mortgage backed securities and a revolving credit facility, banking sources said.

Covenant-lite loans lack the maintenance covenants typically seen in leveraged loans. Such covenants are generally considered protective for investors.

Deutsche Bank and Bank of America Merrill Lynch are leading the refinancing discussions. Goldman Sachs and Morgan Stanley are also expected to have lead roles in the refinancing.

Reuters earlier reported that Blackstone Group selected Deutsche Bank, Goldman Sachs Group Inc, Bank of America Corp and Morgan Stanley to lead the IPO, citing sources.

Deutsche Bank, Bank of America, Morgan Stanley and Goldman Sachs declined to comment on the financing package. Hilton and Blackstone did not return calls by press time.

Blackstone took Hilton private in 2007 in a deal valued at $26.7 billion. Hilton’s brands include Conrad, Doubletree, Embassy Suites, Homewood Suites, Home2Suites, Hilton Garden Inn, Hampton Inn, and Hilton Grand Vacations.

Editing By Jon Methven

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