Wyndham Hotels & Resorts, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Long-Term Debt and Borrowing Arrangements

Long-Term Debt and Borrowing Arrangements

6 Months Ended

Jun. 30, 2019

Long-Term Debt and Borrowing Arrangements

The Company’s indebtedness consisted of:



	June 30, 2019		December 31, 2018
Long-term debt: ^(a)
$750 million revolving credit facility (due May 2023)	$	—	$	—
Term loan (due May 2025)	1,574		1,582
5.375% senior unsecured notes (due April 2026)	494		494
Finance leases	63		65
Total long-term debt	2,131		2,141
Less: Current portion of long-term debt	21		21
Long-term debt	$	2,110	$	2,120


(a)	The carrying amount of the term loan and senior unsecured notes are net of deferred debt issuance costs of $19 million and $21 million as of June 30, 2019 and December 31, 2018, respectively.

Maturities and Capacity

The Company’s outstanding debt as of June 30, 2019 matures as follows:



	Long-Term Debt
Within 1 year	$	21
Between 1 and 2 years	21
Between 2 and 3 years	21
Between 3 and 4 years	21
Between 4 and 5 years	21
Thereafter	2,026
Total	$	2,131

As of June 30, 2019, the available capacity under the Company’s revolving credit facility was as follows:



	Revolving Credit Facility
Total capacity	$	750
Less: Letters of credit	15
Available capacity	$	735

Deferred Debt Issuance Costs

The Company classifies deferred debt issuance costs related to its revolving credit facility within other non-current assets on the Condensed Consolidated Balance Sheets. The Company had deferred debt issuance costs of $5 million as of both June 30, 2019 and December 31, 2018.

Cash Flow Hedge

The Company has hedged a portion of its $1.6 billion term loan. As of June 30, 2019, the pay-fixed/receive-variable interest rate swaps hedge $1.1 billion of the Company’s term loan interest rate exposure, of which $600 million has a remaining term of approximately five years with a weighted average fixed rate of 2.55% and $500 million has a remaining term of approximately three years with a weighted average fixed rate of 2.42%. The variable rates of the swap agreements are based on one-month LIBOR. The aggregate fair value of these interest rate swaps was a $37 million and $5 million liability as of June 30, 2019 and December 31, 2018, respectively, which was included within other non-current liabilities on the Condensed Consolidated Balance Sheets. Unrealized losses recognized in accumulated other comprehensive income (“AOCI”) for the six months ended June 30, 2019 and 2018 were $32 million ($24 million, net of taxes) and $3 million, respectively.

Interest Expense, Net

Wyndham Hotels incurred net interest expense of $26 million and $10 million for the three months ended June 30, 2019 and 2018, respectively, and $50 million and $11 million for the six months ended June 30, 2019 and 2018, respectively. Cash paid related to such interest was $50 million for the six months ended June 30, 2019. There were no cash payments related to interest in the 2018 period.