HGV raises credit facility, repurchases stock
Hilton Grand Vacations (HGV) has increased its credit facility to $1 billion from $400 million, and revealed plans for a share repurchase programme.
The credit facility increase comes after the company refinanced and increased the capacity under its existing revolving facility by $600 million to $800 million. As of the transaction close, $745 million remains available under the revolver.
HGV also refinanced and increased the existing term loans under the current credit agreement outstanding immediately prior to 28 November to an aggregate outstanding principal amount of $200 million.
This new credit facility provides the flexibility and scale to execute HGV’s diversified capital deployment strategy, where key improvements include incrementally better pricing spreads and broader latitude to deploy capital.
Proceeds of the term facility will be used by HGV to refinance existing indebtedness and for working capital and general corporate purposes.
In a separate development, the company has announced that its board of directors has approved a share repurchase programme authorising the company to purchase up to $200 million of its issued and outstanding common stock.
Mark Wang, HGV’s president and CEO, said: “Given the positive trajectory of our business and flexibility provided by our new credit facility, we’re pleased to add share repurchases to our capital allocation priorities.
“While investing in the growth of our business remains our top priority, we believe we also have the capacity to return capital to our shareholders and still maintain a strong balance sheet.”
The timing and amounts of any repurchases under the programme will depend on certain factors, including, but not limited to, market conditions and prices; available funds; and alternative uses of capital.
The stock repurchase programme may be carried out through open-market purchases, block trades or other transactions. HGV expects to fund the repurchase programme through a combination of cash on hand, operating cash flow, receivables funding and bank facilities.