Hilton upsizes senior notes offering to $1 billion

MCLEAN, Va. - Hilton Worldwide Holdings Inc. (NYSE:HLT), the $64 billion hospitality giant, announced Tuesday that its subsidiary has doubled the size of its planned debt offering to $1 billion from the previously announced $500 million. According to InvestingPro data, the company currently operates with a moderate level of debt and maintains a GREAT financial health score.

The company’s indirect subsidiary, Hilton Domestic Operating Company Inc., has finalized terms for 5.750% Senior Notes due 2033, according to a press release statement. The transaction is expected to close on July 7, 2025, subject to customary closing conditions.

Hilton intends to use $515 million of the proceeds to repay indebtedness under its senior secured revolving credit facility, with the remainder allocated for general corporate purposes.

The notes will be offered only to qualified institutional buyers under Rule 144A of the Securities Act and to certain non-U.S. persons in offshore transactions under Regulation S. The securities have not been registered under the Securities Act of 1933 and cannot be offered or sold in the United States except through exemptions from registration requirements.

This debt offering comes as the hospitality industry continues to navigate various economic challenges including inflation and interest rate fluctuations. Hilton operates one of the largest hotel chains globally with multiple brands across different market segments.

The company did not provide specific reasons for doubling the size of the offering in its announcement.

In other recent news, Hilton Worldwide Holdings Inc. announced plans for its subsidiary, Hilton Domestic Operating Company Inc., to offer $500 million in Senior Notes due 2033. The proceeds from this offering are intended to repay $515 million of existing debt. In terms of analyst activity, JPMorgan initiated coverage on Hilton with an overweight rating, highlighting its potential for high-single-digit EBITDA growth and strong free cash flow. Jefferies also upgraded Hilton’s stock rating to Buy, increasing the price target to $296, citing the company’s robust business model and growth prospects.

Raymond James adjusted its price target for Hilton to $275, maintaining an Outperform rating despite a slight downturn in full-year RevPAR and EBITDA projections. The firm noted a decline in demand in the leisure segment but emphasized resilience in group business with a 6% RevPAR increase in the first quarter. Hilton’s management updated its full-year 2025 RevPAR growth forecast, reflecting a range of 0-2%, with expectations of net unit growth between 6-7%.

Jefferies analysts expressed confidence in Hilton’s ability to maintain performance amid economic uncertainties, citing premium valuation multiples and a strong management team. They noted Hilton’s momentum in its business model, aligning with above-consensus estimates. Despite some challenges, analysts remain optimistic about Hilton’s growth potential, supported by its strategic initiatives and market positioning.

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