Wyndham International's bank debt has regained considerable ground since the company reached an agreement with its lenders to extend the maturity on its revolver and increasing rate loan from June 2004 to April 2006 and reduce the size of the facility. The company's IRL traded as high as the 91 level and its "B" loan was quoted in the mid-80s. Earlier this month, the IRL was quoted in the 83-841/2 range and the market for the "B" loan was 801/2 811/2 (LMW, 6/2). People assume at some point that the loan will be redone, said one trader, explaining the uptick.
In order to complete the extension of the loans, the company must repay $194 million of its credit facility, explained Judy Hendrick, Wyndham's treasurer. The company has nine months to complete the paydown. Recently, Wyndham completed a $425 million mortgage refinancing with a portion of the proceeds dedicated to repay approximately 65% of the amount required on the loans. The Dallas-based company will use the cash to repay the IRL and "B" piece and there will be a corresponding reduction of the commitment on the company's revolver, said Hendrick. The remaining amount of the paydown will be raised through additional asset sales, refinancings and cash flows, she added.