Item 1.01: Entry into a Material Definitive Agreement.
Offering of the Notes
On August 7, 2018, Hyatt Hotels Corporation (the “Company”) issued and sold $400,000,000 of its 4.375% Senior Notes due 2028 (the “Notes”) in a public offering (the “Offering”) pursuant to an effective Registration Statement on FormS-3 (RegistrationNo. 333-221740) (the “Registration Statement”). The Company received net proceeds from the Offering of approximately $396 million, after deducting underwriters’ discounts and estimated offering expenses payable by the Company. The Company intends to use the proceeds from the Offering for general corporate purposes, which may include the full or partial redemption of its 6.895% Senior Notes due 2019, repayment of secured debt, share repurchases, acquisitions, or any other general corporate purpose the Company may deem necessary or advisable, and to pay related fees and expenses.
Indenture
The Notes were issued pursuant to an indenture, dated as of August 14, 2009 (the “Original Indenture”), as supplemented by a second supplemental indenture, dated as of August 4, 2011 (the “Second Supplemental Indenture”), and a fourth supplemental indenture, dated as of May 10, 2013 (the “Fourth Supplemental Indenture” and, together with the Original Indenture and the Second Supplemental Indenture, the “Base Indenture”), between the Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”), and a seventh supplemental indenture, dated as of August 16, 2018 (the “Seventh Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), between the Company and the Trustee, specifying the terms of the Notes.
The Original Indenture was included as Exhibit 4.3 to the Company’s Registration Statement on FormS-1 (No.333-161068), filed on September 9, 2009, and is incorporated herein by reference. The Second Supplemental Indenture was included as Exhibit 4.2 to the Company’s Registration Statement on FormS-3 (No.333-176038), filed on August 4, 2011, and is incorporated herein by reference. The Fourth Supplemental Indenture was included as Exhibit 4.1 to the Company’s Current Report on Form8-K (No.001-34521) filed on May 10, 2013, and is incorporated herein by reference. The Seventh Supplemental Indenture and the form of the Notes are attached hereto as Exhibits 4.1 and 4.2, respectively, and are incorporated herein by reference. The Seventh Supplemental Indenture and the form of the Notes are also filed with reference to, and are hereby incorporated by reference into, the Registration Statement.
Terms of the Notes
Interest and Maturity.The Notes bear interest at a rate of 4.375% per annum, which will be payable semi-annually on March 15 and September 15 of each year, beginning on March 15, 2019. The Notes will mature on September 15, 2028.
Redemption.At any time before the date that is three months prior to the maturity of the Notes, the Company may redeem some or all of the Notes at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest, if any, plus a “make-whole” amount. At any time on or after the date that is three months prior to the maturity of the Notes, the Company may redeem some or all of the Notes at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest, if any.
Change of Control.In the event of a Change of Control Triggering Event, as defined in the Indenture, the holders of the Notes may require the Company to purchase for cash all or a portion of the holders’ Notes at a purchase price equal to 101% of the principal amount of the Notes purchased, plus accrued and unpaid interest, if any.
Covenants.The Indenture does not limit the ability of the Company or its subsidiaries to issue or incur other debt or issue preferred stock. Subject to certain important exceptions, the Indenture contains covenants that, among other things, limit the Company’s ability and the ability of certain of the Company’s subsidiaries to create liens on principal property, enter into sale and leaseback transactions with respect to principal property and enter into mergers or consolidations or transfer all or substantially all of the Company’s assets.
Ranking.The Notes rank equal in right of payment to all of the Company’s other existing and future unsecured unsubordinated indebtedness, senior in right of payment to all of the Company’s future subordinated indebtedness and effectively subordinated in right of payment to all of the Company’s existing and future secured obligations to the extent of the value of the assets securing such obligations. The Notes are not obligations of, or are guaranteed by, any of the Company’s subsidiaries. As a result, the Notes are structurally subordinated to all of the existing and future liabilities (including trade payables) of each of the Company’s subsidiaries.
