TYSONS, Va. – Park Hotels & Resorts Inc. (NYSE: PK), a real estate investment trust, has upsized its offering of senior notes to $550 million, a notable increase from the initial $450 million. The notes, with a 7.000% interest rate, are due in 2030 and were priced at face value.
The company's subsidiaries, including Park Intermediate Holdings LLC, PK Domestic Property LLC, and PK Finance Co-Issuer Inc., are responsible for the offering. These notes are set to mature on February 1, 2030, and will be guaranteed by Park and certain other subsidiaries.
The proceeds from this offering, alongside a minimum of $200 million from a new unsecured term loan, are earmarked for the purchase and redemption of all $650 million of the Issuers' 7.500% Senior Notes due in 2025. This action is concurrent with a cash tender offer for the 2025 Notes. Should the tender offer not be completed, the funds will still be used to redeem the 2025 Notes in full and cover related fees and expenses. Any remaining proceeds are intended for general corporate purposes.
The offering, which is subject to customary closing conditions, is anticipated to be finalized on May 16, 2024. These notes have not been registered under the Securities Act of 1933 or any state securities laws and will be available only to qualified institutional buyers and certain non-U.S. persons in offshore transactions.
The announcement also contains forward-looking statements regarding the company's expectations about its business operations and financial outcomes. These statements are subject to various risks and uncertainties that could cause actual results to differ from those projected.
InvestingPro Insights
As Park Hotels & Resorts Inc. (NYSE: PK) embarks on its upsized offering of senior notes, the company's financial health and market position become a focal point for investors. With a market capitalization of $3.35 billion, Park Hotels & Resorts Inc. is a significant player in the Hotel & Resort REITs industry. The company's management has shown confidence in its strategy and performance through an aggressive share buyback program, which is an InvestingPro Tip indicating that they believe the shares are undervalued and a good investment.
Another InvestingPro Tip that stands out is the company's trading at a low revenue valuation multiple, with a Price / Book ratio as of Q1 2024 at just 0.89. This suggests that the stock may be undervalued compared to the company's asset value, which could be an attractive point for value investors.
InvestingPro Data metrics provide a deeper dive into the company's financials. The P/E Ratio stands at 35.97, reflecting the market's valuation of the company's earnings. While this may seem high, the company's significant price uptick over the last six months of 39.41% suggests strong market confidence, which has been echoed by a remarkable one-year price total return of 50.01%.
For those interested in exploring more about Park Hotels & Resorts Inc., there are additional InvestingPro Tips available, which can be accessed at: https://www.investing.com/pro/PK. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further insights and analytics that could inform smarter investment decisions.
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