Marriott Vacations Worldwide Corporation

09/19/2025 | Press release | Distributed by Public on 09/19/2025 04:03

Material Agreement, Financial Obligation (Form 8-K)

Item 1.01 Entry into a Material Definitive Agreement
Indenture and Notes
On September 18, 2025, Marriott Ownership Resorts, Inc. (the "Issuer"), a wholly owned subsidiary of Marriott Vacations Worldwide Corporation ("MVW" or the "Company"), entered into an Indenture (the "Indenture"), by and among the Issuer, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, in connection with the issuance and sale by the Issuer to Wells Fargo Securities, LLC, as the representative of the several initial purchasers (the "Initial Purchasers"), and the other Initial Purchasers of $575 million aggregate principal amount of the Issuer's 6.500% Senior Notes due 2033 (the "Notes").
The Issuer intends to use the net proceeds from the Notes, together with cash on hand, (i) for the repayment of $575 million outstanding aggregate principal amount of the Issuer's 0.00% Convertible Senior Notes due at or prior to maturity on January 15, 2026 (the "2026 Convertible Notes") (provided, that during the period between the closing of the offering of the Notes and the maturity date of the 2026 Convertible Notes, the Issuer intends to use such net proceeds to repay borrowings under the Revolving Credit Facility and/or invest in cash equivalent securities) and (ii) to pay transaction expenses and fees in connection with the foregoing.
The Notes will bear interest at a rate of 6.500% per year, payable in cash semi-annually in arrears on April 1 and October 1 of each year, commencing on April 1, 2026. The Notes will mature on October 1, 2033.
The Notes will initially be guaranteed on a senior unsecured basis by MVW and each of MVW's subsidiaries that guarantees the Corporate Credit Facility (as defined below), and, in the future, by each of MVW's subsidiaries (other than receivables subsidiaries or foreign subsidiaries) that becomes a borrower or a guarantor under a credit facility or other capital markets debt securities of the Issuer or any guarantor of the Notes. "Corporate Credit Facility" means MVW's corporate credit facility consisting of (i) a $800 million seven-year Term Loan Credit Facility, (ii) a $800 million five-year Revolving Credit Facility and (iii) a $450 million Delayed Draw Term Loan Credit Facility, the proceeds of which may only be used to finance (or reimburse cash used for) any redemption or repurchase of the 2026 Convertible Notes. In connection with the issuance of the Notes, the Delayed Draw Term Loan Credit Facility was terminated.
The Notes are senior unsecured obligations of the Issuer and the guarantors thereof, rank pari passu in right of payment with all of the Issuer's and the guarantors' existing and future senior indebtedness (including borrowings under the Corporate Credit Facility and the Issuer's or Company's outstanding senior notes and convertible notes), will be senior in right of payment to any future subordinated indebtedness of the Issuer and the guarantors, are effectively junior to all of the Issuer's and the guarantors' existing and future secured indebtedness (including under the Corporate Credit Facility) to the extent of the value of the collateral securing such indebtedness, and are structurally subordinated to any existing and future obligations of any of MVW's subsidiaries that do not guarantee the Notes.
Prior to October 1, 2028, the Issuer may, at its option, redeem the Notes, in whole or in part, at a price equal to 100% of the principal amount, plus a "make-whole" premium, plus accrued and unpaid interest, if any, on the Notes redeemed to, but not including, the date of redemption. Additionally, prior to October 1, 2028, the Issuer may, at its option, redeem up to 40% of the original aggregate principal amount of the Notes with the net proceeds of certain equity offerings at a redemption price equal to 106.500% of the principal amount of the Notes, together with accrued and unpaid interest, if any, on the Notes redeemed to, but not including, the date of redemption. On or after October 1, 2028, the Issuer may, at its option, redeem the Notes, in whole or in part, at the redemption prices (expressed as a percentage of the principal amount) set forth below, plus accrued and unpaid interest, if any, on the Notes redeemed, to, but not including, the applicable redemption date if redeemed during the twelve-month period commencing on October 1 of the years indicated below:
Year Price
2028 103.250%
2029 101.625%
2030 and thereafter
100.000%
If MVW experiences a "Change of Control Triggering Event" (as defined in the Indenture) or sells certain of its assets, MVW may be required to repurchase the Notes at the prices set forth in the Indenture, subject to certain conditions.
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The Indenture contains certain covenants, which among other things, limit the ability of MVW and its restricted subsidiaries to (i) incur additional indebtedness; (ii) pay dividends or make other restricted payments; (iii) make loans and investments; (iv) incur liens; (v) sell assets; (vi) enter into affiliate transactions; (vii) enter into certain sale and leaseback transactions; (viii) enter into agreements restricting MVW's subsidiaries' ability to pay dividends; and (ix) merge, consolidate or amalgamate or sell all or substantially all of its property. These covenants are subject to a number of important exceptions and qualifications. The Indenture provides for customary events of default, which include (subject in certain cases to customary grace and cure periods), among others, nonpayment of principal or interest, failure to comply with other covenants or agreements in the Notes or the Indenture, failure to pay certain other indebtedness, failure to pay certain final judgments, failure of certain guarantees to be enforceable and certain events of bankruptcy or insolvency. These events of default are subject to a number of important qualifications, limitations and exceptions that are described in the Indenture.
The offer and sale of the Notes and the related guarantees were made in the United States only to persons reasonably believed to be qualified institutional buyers pursuant to an exemption from registration provided by Rule 144A promulgated under the Securities Act of 1933, as amended (the "Securities Act") and outside the United States in offshore transactions to non-U.S. persons in compliance with Regulation S under the Securities Act. The Notes and the related guarantees have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
The foregoing description of the Indenture and the Notes does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Indenture and the form of Note, copies of which are filed as Exhibits 4.1 and 4.2 hereto, respectively, and are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information included in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
No Offer or Solicitation
This communication is for informational purposes only and is not intended to and does not constitute an offer to buy, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
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