Latham & Watkins Advises Hyatt Hotels on US$2.3 Billion Capital Markets Financings

Chicago-based team from the firm’s Capital Markets Practice and Hospitality, Gaming & Leisure Industry Group advised the global hospitality company on the concurrent offerings.

September 28, 2021

Latham & Watkins represented Hyatt Hotels Corporation in concurrent equity and debt capital markets financings intended to fund a portion of the purchase price for Hyatt’s pending acquisition of Apple Leisure Group, to refinance existing indebtedness and for general corporate purposes.

The equity financing involved a public offering of 8,050,000 shares of Hyatt’s Class A common stock, including the full exercise of the underwriters’ option to purchase additional shares, at a price of US$74.50 per share. The offering raised net proceeds of approximately US$575.2 million, after deducting underwriting discounts and expenses.

The upsized, three-part US$1.75 billion bond financing involved a public offering of: 

  • US$700 million of two-year 1.3% fixed rate notes; 
  • US$300 million of two-year floating rate notes indexed to Compounded SOFR, reset quarterly, plus a margin of 105 basis points; and 
  • US$750 million of three-year 1.8% fixed rate notes.

The notes were rated Baa3 by Moody’s, BBB- by Standard & Poor’s and BBB- by Fitch.

The offerings are not contingent on the consummation of the pending Apple Leisure Group acquisition.

Hyatt previously announced that it intends to fund more than 80% of the $2.7 billion purchase price for the Apple Leisure Group acquisition with a combination of $1.0 billion in cash on hand and new debt financings (including a portion of the proceeds from the bond offering), and the remainder with the proceeds of the equity offering.

Latham is also advising Hyatt in the Apple Leisure Group transaction, and previously counseled Hyatt in amending its US$1.5 billion revolving credit facility to facilitate the Apple Leisure Group transaction. Following completion of the Apple Leisure Group transaction, Hyatt will offer the largest portfolio of luxury all-inclusive resorts in the world, double its global resort footprint, be the largest operator of luxury hotels in Mexico and the Caribbean and expand its European footprint by 60% by extending its brand footprint into 11 new European markets.

Latham assembled an interdisciplinary team in Chicago, including from its market-leading Capital Markets Practice and its Hospitality, Gaming & Leisure Industry Group, to advise Hyatt in the financings. Corporate partners Michael Pucker, Cathy Birkeland, Roderick Branch, and Alexa Berlin led the Latham deal team, with counsel Manasi Bhattacharyya. Associates Sara Mykrantz, Sean Stanton, Andrew Rutsky, and Greer Gaddie supported the transaction. Advice was also provided on bank finance matters by partner Cindy Caillavet; on tax matters by partners Diana Doyle and Rene de Vera, with associates Christopher Ohlgart and Dalton Powell; and on investment fund matters by partner Nabil Sabki, with associate Daniel Filstrup.

 
 
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