B&B Hotels out with €100M term loan for liquidity; waiver request

B&B Hotels has launched a €100 million term loan via Goldman Sachs and Morgan Stanley, with a concurrent waiver process for existing investors.

A lender call will be held on March 3 at 9 a.m. UK time, and new-money commitments are due at noon UK time on March 5. The consent deadline for the waiver is set for March 9.

The new cov-lite debt will rank pari pasu with the firm's existing term loan and will mature in line with that facility in July 2026. The new facility is talked at E+550 with a 0% floor and 95.5 offer price, suggesting a yield to maturity of 6.71%. The debt will be non-call for 18 months, and then callable at par.

Proceeds from the new term loan, which comes in conjunction with an equity contribution, will be used for general corporate and liquidity purposes.

The firm is currently rated CCC+/Caa1 after it was downgraded in July 2020 following concerns about the hotel group's ongoing operations and cash flow due to the lockdown restrictions.

Goldman Sachs agreed to buy B&B from PAI in a €1.9 billion deal backed by a €665 million term loan B and a €155 million second lien. The firm then returned in February 2020 with a repricing and increase, to leave the first lien loan as a €715 million facility at E+387.5 with a 0% floor.

The outstanding loan was seen quoted in a mid-90s area before the new facility was announced.

B&B Hotels operates in 11 European countries and Brazil, and focuses on the higher-end of the budget sector. The firm runs an asset-light model, and leases almost all its hotels.