Playa Hotels & Resorts raised $204 million of additional debt financing, sold $20 million of its ordinary shares at a price of $4.10 per share in a private transaction and entered into the fourth amendment to the company’s credit agreement with its senior secured credit facility lenders.
Davidson Kempner Capital Management provided the $204 million of additional debt financing, which consists of:
- A $94 million credit facility maturing in April of 2024 with an effective interest rate of 9.25%, which Playa Hotels & Resorts plans to immediately draw
- A $110 million property loan agreement secured by the Hyatt Ziva & Zilara Cap Cana and the Hilton Rose Hall maturing in July of 2025 with an effective interest rate of 9.25%, which is expected to be funded in June 2020 upon satisfaction of customary conditions precedent
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Playa Hotels & Resorts also sold $20 million of its ordinary shares to affiliates of Davidson Kempner Capital Management at a price of $4.10 per share in a private transaction that was exempt from registration under the Securities Act of 1933.
According to an 8K filed with the SEC, Deutsche Bank is serving as administrative agent on the fourth amendment to Playa Hotels & Resorts’ credit agreement. The amendment (i) substitutes a minimum required liquidity test for the leveraged-based financial covenant from Q3/20 through, and including, Q2/21 (the covenant relief period), (ii) modifies the leveraged-based financial covenant for certain test dates after the covenant relief period, and (iii) adds certain restrictions on, among other things, the incurrence of additional debt and making of investments, dispositions and restricted payments during the covenant relief period, as the case may be, all as more fully set forth in the fourth amendment.
“With this additional financing significantly improving Playa’s liquidity profile, and only $85 million in debt maturing in 2022, we look forward to delivering excellent Service from the Heart and taking market share in the new travel landscape,” Bruce Wardinski, chairman and CEO of Playa, said. “Our ability to access the capital markets is a reflection of the on-going investor support and our commitment to driving superior returns.”
In addition, according to the 8K, Cortland Capital Market Services is serving as administrative agent and Acquiom Agency Services is serving as Mexican collateral agent on $94 million in term loans for Playa Hotels & Resorts.
Playa Hotels & Resorts will use the proceeds from these transactions for general corporate purposes.
Playa Hotels & Resorts is an owner, operator and developer of resorts in beachfront locations in Mexico and the Caribbean.
