Market Overview

Choice Hotels Announces Pricing of Senior Notes Offering

Choice Hotels International, Inc. (NYSE: CHH) today announced the pricing of its senior notes in an aggregate principal amount of $400 million, in an underwritten, registered public offering. The notes will mature in June 2022 and will bear interest at a rate of 5.750%. The notes will be unsecured, unsubordinated obligations of the Company and will be guaranteed by certain U.S. subsidiaries of the Company.

The Company intends to use the net proceeds from the notes offering, together with a portion of the proceeds of an anticipated senior secured credit facility that the Company expects to enter into within approximately 30 days after the completion of the notes offering, to pay during 2012 a special cash dividend of approximately $600 million in the aggregate to the Company's stockholders. However, whether the Company will declare a special dividend, and, if so, the timing, amount and nature of any such dividend, will be subject to approval by the Company's board of directors. Any such approval will depend on a variety of factors, including the Company's ability both to complete the sale of the notes and to enter into the anticipated senior secured credit facility on terms acceptable to the Company; the Company's financial results, cash requirements and financial condition; the Company's ability to pay dividends under applicable state law; and other factors deemed relevant by the Company's board of directors. If the Company's board of directors does not approve a special cash dividend in the currently anticipated amount of approximately $600 million, the Company may use the proceeds from the sale of the notes to fund a special cash dividend of a smaller amount or may elect not to declare any special cash dividend, in which case the Company expects to use the proceeds of the notes offering for general corporate purposes. The notes offering is not conditioned on the closing of the anticipated new senior secured credit facility.

Posted-In: News Financing Offerings

 

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