Wyndham Hotels & Resorts Inc has successfully renegotiated the terms of its existing $1.1bn senior secured term loan.

The loan, scheduled for repayment in May 2030, saw significant interest from investors, allowing the company to increase the amount by $400m.

Interest rates and financial benefits

The revised loan terms include a lower interest rate, now set at the secured overnight financing rate (SOFR) plus 1.75%. This adjustment reduces the interest rate by 60 basis points and sets the issue price at 99.875%.

According to Wyndham, this repricing is expected to save the company $6m in annual interest expenses.

The adjustment in the loan's interest rate and increase in size marks one of the most competitively priced adjustments in the era of SOFR-based financing.

Investor confidence and corporate strategy

The decision to reprice and increase the loan stems from strong investor confidence in Wyndham's business model, which focuses on a low asset-intensity approach and high cash generation.

Michele Allen, Wyndham's chief financial officer and head of strategy, highlighted the company's robust performance from 2023 to 2024 as a key factor in achieving favourable loan terms.

Use of proceeds and financial partners

Wyndham plans to allocate the net proceeds from this new financing arrangement for general corporate purposes. These include the repayment of outstanding balances under the company’s revolving credit facility.

Several major financial institutions, including Wells Fargo Securities, Deutsche Bank Securities, JPMorgan Chase Bank and Barclays Bank, served as arrangers and bookrunners for the loan.

The financial restructuring is part of Wyndham’s broader strategy to enhance its financial flexibility while continuing to grow its operations globally.