Quarterly report pursuant to Section 13 or 15(d)

Long-Term Debt and Borrowing Arrangements

v3.19.3
Long-Term Debt and Borrowing Arrangements
 9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Long-Term Debt and Borrowing Arrangements
Long-Term Debt and Borrowing Arrangements
The Company’s indebtedness consisted of:
 
September 30, 2019
 
December 31, 2018
Long-term debt: (a)
 
 
 
$750 million revolving credit facility (due May 2023)
$
—

 
$
—

Term loan (due May 2025)
1,572

 
1,582

5.375% senior unsecured notes (due April 2026)
494

 
494

Finance leases
61

 
65

Total long-term debt
2,127

 
2,141

Less: Current portion of long-term debt
21

 
21

Long-term debt
$
2,106

 
$
2,120

 
(a)
The carrying amount of the term loan and senior unsecured notes are net of deferred debt issuance costs of $18 million and $21 million as of September 30, 2019 and December 31, 2018, respectively.

Maturities and Capacity
The Company’s outstanding debt as of September 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
22

Thereafter
2,021

Total
$
2,127


As of September 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. Such deferred debt issuance costs were $4 million and $5 million as of September 30, 2019 and December 31, 2018, respectively.

Cash Flow Hedge
The Company has hedged a portion of its $1.6 billion term loan. As of September 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 2.54% and $500 million has a remaining term of approximately two years with a weighted average fixed rate of 2.41%. The variable rates of the swap agreements are based on one-month LIBOR. The aggregate fair value of these interest rate swaps was a $42 million and $5 million liability as of September 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 three and nine months ended September 30, 2019 were $5 million ($3 million, net of taxes) and $36 million ($27 million, net of taxes), respectively. Unrealized gains recognized in AOCI for the three and nine months ended September 30, 2018 were $5 million ($5 million, net of taxes) and $9 million ($7 million, net of taxes), respectively.

Interest Expense, Net
Wyndham Hotels incurred net interest expense of $25 million and $24 million for the three months ended September 30, 2019 and 2018, respectively, and $76 million and $36 million for the nine months ended September 30, 2019 and 2018, respectively. Cash paid related to such interest was $69 million and $22 million for the nine months ended September 30, 2019 and 2018, respectively.