Park Hotels & Resorts Inc. Announces Financial Covenant Waivers for Credit Facilities and Maturity Extension for Revolving Credit Facility

Park Hotels & Resorts Inc. (NYSE: PK) (“Park” or the “Company”) today announced that it has entered into amendments (the “Credit Amendments”) to its $1.0 billion fully drawn revolving credit facility (the “Revolving Credit Facility”), $700 million term loan and $670 million term loan. The Credit Amendments waive the existing quarterly-tested financial covenants through March 31, 2021 and extend the maturity of the Revolving Credit Facility to December 2021.

Key terms of the Credit Amendments include the following –

• Extension of the Revolving Credit Facility maturity date from December 2020 to December 2021.
• Waiver of the existing quarterly-tested financial covenants beginning in the second quarter of 2020 through the first quarter of 2021, unless earlier terminated by the Company at its discretion.
• Adjustment of certain financial covenants to revised levels for temporary periods commencing in the second fiscal quarter of 2021 once quarterly testing of financial covenants resumes.
• Addition of a requirement to maintain minimum liquidity of $200 million.
• Guarantees by certain Park-affiliated entities and pledges of equity interests in Park-affiliated entities owning certain unencumbered assets during the waiver period and until the ratio of net debt to EBITDA falls below 6.50x.
• Increase of the interest rate for each facility to the highest leverage-based margins for the duration of the waiver period.
• Addition of a LIBOR floor of 25 basis points to the variable interest rate calculation for both facilities.
• Addition of certain restrictions and covenants for the duration of the waiver period, including restrictions on dividend and distribution payments (subject to REIT requirements) and share repurchases and new covenants limiting the incurrence of additional indebtedness, asset sales, investments and discretionary capital expenditures (in each case subject to various exceptions) and requiring certain mandatory prepayments.

“We are pleased to have successfully amended our unsecured credit agreements during this unprecedented time,” said Thomas J. Baltimore, Jr., Chairman and CEO of Park. “With these changes, Park is well positioned to weather this difficult period for an extended period of time. We are very thankful to our valuable lending partners for their ongoing support and partnership.”