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Wyndham Worldwide amends credit agreements, hotel unit prices notes offering

Wyndham Worldwide Corp. amended three credit agreements in connection with its planned spinoff of its hotels business, pending offer to buy La Quinta Holdings Inc.'s franchising and management business and sale of its European vacation rental business.

The amendments on the deals signed 2015, 2016 and 2017 provide, among other things, the ability of Wyndham Hotels & Resorts Inc. to incur debt in connection with the spinoff and acquisition of La Quinta.

Under the terms of the amendments, the 2017 credit agreement will terminate after the hotels business is spun off. Wyndham Worldwide filed a Form 10 registration statement with the SEC on March 19 for the plan that involves splitting its hotels business into two separate publicly traded companies.

The 2016 credit agreement will be prepaid following the spinoff and the sale of Wyndham Worldwide's rental business. Closing of the rental business sale is expected to occur in the second quarter.

The 2015 credit agreement will terminate after Wyndham Worldwide obtains a new senior secured revolving loan facility on or after the spinoff. Upon the sale of the rental business and closing of the spinoff, commitments under the agreement will be reduced to $1.00 billion from $1.50 billion.

Wyndham Worldwide also said that Wyndham Hotels priced a private offering of $500 million senior unsecured notes due 2026 at 100% of their principal amount. The notes will bear an annual rate of 5.375% and will mature April 15, 2026.

Proceeds from the issue, along with the borrowings under new proposed credit facilities, will be used to fund the cash portion, fees and expenses related to the La Quinta offer and for general corporate purposes. The offer is not contingent upon the consummation of the La Quinta acquisition. Wyndham Hotels, Wyndham Worldwide and Barclays Capital Inc. signed a purchase agreement with regard to the pricing of the notes.

Wyndham Hotels intends to enter into credit facilities providing a $1.60 billion senior secured term loan and a $750 million senior secured revolver.