| Item 1.01. | Entry into a Material Definitive Agreement. |
On May 3, 2022, Hilton Grand Vacations Trust I LLC (the “Trust”), a subsidiary of Hilton Grand Vacations Inc. (the “Company”), entered into an Amended and Restated Receivables Loan Agreement, dated as of May 3, 2022, by and among the Trust, as borrower, Wells Fargo Bank, National Association, as paying agent and securities intermediary, Bank of America, N.A., as administrative agent and as structuring agent, certain financial institutions as conduit lenders, certain financial institutions as committed lenders, and certain financial institutions as managing agents (the “Amended Warehouse Credit Agreement” and the revolving warehouse facility related thereto, the “Warehouse Credit Facility”). The Amended Warehouse Credit Agreement amends and restates the prior credit agreement in its entirety and, among other things:
| | • | | increases the borrowing capacity from $450.0 million to $750.0 million; |
| | • | | renews and extends the commitment period of the Warehouse Credit Facility from August 12, 2022 to May 3, 2024, with a maturity date of May 26, 2025; |
| | • | | permits the Trust to pledge as collateral timeshare loan receivables originated by certain subsidiaries of Diamond Resorts Corporation (the “Diamond Timeshare Loans”), subject to similar eligibility criteria and other conditions for timeshare loans receivables originated by Hilton Resorts Corporation and its subsidiaries, and generally updates the Warehouse Credit Facility and certain defined terms to reflect the foregoing; |
| | • | | uses one-month term SOFR as a main benchmark interest rate; |
| | • | | increases the maximum advance rate for the borrowing base calculation from 87.50% to 90.00%; |
| | • | | amends the “Collateral Value” definition to provide a separate advance rate for the Diamond Timeshare Loans based on FICO® scores, foreign obligors and domestic obligors with no FICO® score; and |
| | • | | includes customary used and unused fees, some of which will be based on the achievement of key environmental, social and governance performance indicators applicable to the Company. |
As of May 2, 2022, the Company had no outstanding borrowings under the Warehouse Credit Facility.
Affiliates of various lenders and/or agents under the Warehouse Credit Facility, including Bank of America, N.A., Deutsche Bank AG, Wells Fargo Bank, National Association, Barclays Bank PLC, Credit Suisse AG, MUFG Bank LTD., Citizens Bank, N.A., Regions Bank, and Truist Bank, are also lenders and/or agents under the Company’s $1.0 billion secured credit facility. Any or all of such lenders and/or agents have performed, and may in the future perform, various other commercial banking, investment banking and other financial advisory services for the Company and its subsidiaries for which they have received, and may receive, customary fees and expenses.
This summary is qualified in its entirety by reference to the full text of the Amended Warehouse Credit Agreement, filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
