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Wyndham Obtains Loan Extensions

Pushes Back Its Major Debt Payments To 2006


June 12, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

Wyndham International has obtained loan extensions that have pushed back its major debt payments until 2006.

Wyndham amended its senior debt agreements ($686 million worth of debt) with a consortium of lenders led by JPMorgan Chase. Its $448 million term loan and a $238 million revolving loan scheduled to mature in June 2004 are now due on April 1, 2006.

For the debt amendments to be effective, Wyndham must generate $194 million in net proceeds through refinancing and asset sales. The company has sold $97 million in hotel and real-estate assets this year, bringing its debt to $2.75 billion, down from $4.3 billion in 1999.

"This amendment is a significant achievement for our company," said Wyndham International CEO Fred Kleisner in a press release. "This, coupled with our continued focus on operational initiatives, positions us to take full advantage of the economic recovery when it occurs. We especially appreciate the vote of confidence from our lenders, whose support is instrumental to our success."

CARIBBEAN BUSINESS interviewed Kleisner last year to discuss Wyndham’s financial standing (CB June 27, 2002). He said the company was highly leveraged, though its debt was secured with valuable assets.

"We have more than $750 million invested in hard real estate, which only appreciates, and we also have a strong business model," Kleisner said. "In the worst-case scenario–the first week after 9/11–the liquidity of our company never went below $200 million."

Wyndham identified 55 nonproprietary-branded hotels in its inventory as nonstrategic assets, which it would sell. "We plan to sell $1.5 billion in assets between now and the end of the year and to use 3% of the proceeds to deliver our balance sheet," Kleisner said.

These 55 assets represent 30.7% of the company’s revenue and 28.7% of its adjusted earnings before interest, taxes, depreciation, and amortization.

This Caribbean Business article appears courtesy of Casiano Communications.
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