Business Context and Reporting Period
Park Hotels & Resorts Inc. filed a Form 8-K on September 17, 2025, reporting the entry into a Second Amended and Restated Credit Agreement. This filing details a refinancing and restructuring of the company's senior unsecured credit facilities with Wells Fargo Bank, National Association, as administrative agent.
Key Financial Metrics and Debt Structure
The new Credit Agreement establishes the following facilities:
- Revolving Facility: $1 billion aggregate commitments, maturing September 17, 2029 (extendable).
- 2024 Term Loan: $200 million senior unsecured term loan, maturing May 14, 2027.
- 2025 Term Facility: Up to $800 million delayed draw term loan, available in up to three draws through September 17, 2026, maturing January 2, 2030 (extendable).
- Letters of Credit: Up to $50 million aggregate availability.
- Expansion Option: Ability to increase facilities by up to $1 billion subject to conditions.
As of the Closing Date, no borrowings were outstanding under the Revolving Facility or the 2025 Term Facility. Interest rates are based on a margin over Base Rate, Term SOFR, or Daily SOFR, with margins ranging from 0.40% to 2.75% depending on the facility and the company's Leverage Ratio.
Material Changes Versus Prior Period
The new agreement amends and restates the Existing Credit Agreement dated December 1, 2022. Key changes include:
- Increased Capacity: Revolving commitments increased from $950 million to $1 billion.
- New Facility: Addition of an $800 million delayed draw term facility intended to refinance other indebtedness in 2026.
- Extended Maturities: The Revolving Facility maturity was extended from December 1, 2026, to September 17, 2029. The new 2025 Term Facility matures in 2030.
- Fee Structure: Introduction of a 0.25% per annum ticking fee on the undrawn portion of the 2025 Term Facility until fully drawn or terminated.
Guidance, Covenants, and Risks
The Credit Agreement imposes strict financial maintenance covenants, including:
- Leverage Ratio: Total indebtedness (net of unrestricted cash over $35 million) to EBITDA not to exceed 7.25 to 1.00.
- Fixed Charge Coverage: Reserve adjusted EBITDA to fixed charges not less than 1.50 to 1.00.
- Secured Indebtedness: Ratio to total asset value not to exceed 0.45 to 1.00.
- Unsecured Indebtedness: Ratio to unencumbered pool value not to exceed 0.60 to 1.00.
- Interest Coverage: Adjusted net operating income from unencumbered properties to interest expense on unsecured indebtedness not less than 1.75 to 1.00.
The agreement restricts liens on unencumbered properties, mergers, affiliate transactions, asset sales, and dividend payments. Guarantors may be released if the Leverage Ratio is 6.50 to 1.00 or less for two consecutive fiscal quarters. The filing does not provide specific revenue, profit, or cash flow figures for the reporting period.
Investor Verification Checklist
- Verify the company's current Leverage Ratio to ensure compliance with the 7.25 to 1.00 covenant.
- Confirm the status of the $800 million delayed draw term loan and the specific timing of the intended 2026 draw.
- Review the "unencumbered pool value" of properties to assess the headroom under the 0.60 to 1.00 unsecured indebtedness covenant.
- Monitor the impact of the new ticking fee (0.25% per annum) on the undrawn 2025 Term Facility on future interest expenses.
- Check for any existing indebtedness scheduled for refinancing in 2026 that may impact liquidity requirements.