Hyatt Hotels Corporation is set to issue bonds totalling in effort to finance its strategic acquisition of Playa Hotels & Resorts. The transaction, valued at $2.6 billion, aims to expand Hyatt’s presence in the all-inclusive resort market, particularly in the Caribbean.
The bond sale, scheduled for Monday, involves offering three-year and seven-year fixed-rate bonds. This move is part of Hyatt’s plan to finance its significant acquisition of Playa Hotels & Resorts, known for its all-inclusive properties in the Caribbean.
Market activity is predicted to heighten as approximately six issuers, including Hyatt, prepare to sell debt on Monday. The three-year notes are anticipated to yield 1.3 percentage points above Treasuries, while the seven-year bonds are projected to offer a yield of around 1.75 percentage points over the benchmark rate.
According to Moody’s Ratings, both tranches are expected to carry a Baa3 rating. Meanwhile, S&P Global Ratings and Fitch Ratings are anticipated to assign a BBB- rating, indicating a moderate level of creditworthiness.
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The bonds include a special mandatory redemption clause, requiring Hyatt to redeem the bonds at 101% of their principal amount along with accrued interest if the acquisition of Playa Hotels is not finalized by October 9, 2025, or if the acquisition agreement is terminated.
Notably, the bond offering is not contingent upon the successful completion of the acquisition, which provides some flexibility for investors in the event the transaction faces unforeseen hurdles.
Hyatt’s strategic maneuver to sell bonds underscores its commitment to expanding its market reach through the acquisition of Playa Hotels & Resorts. This financial move positions Hyatt favorably in the competitive hospitality industry, enabling a robust growth pathway.
