Blackstone Reaches Deal To Revamp Hilton's Debt
Blackstone Group reached an agreement to restructure the balance sheet of Hilton Worldwide as it looks to improve the flagging fortunes of its single largest investment.</br></br>Hilton's lenders and Blackstone are finalizing a deal that would cut its $20 billion debt load by about $4 billion, according to two people familiar with the negotiations. The agreement calls for Blackstone's funds to contribute $800 million of new equity, which will be used to buy back debt at a discount. It would also extend the maturity of some debt issues, these people said.</br></br>The restructuring will help shore up Hilton's finances as it struggles through a downturn in the hotel industry. For months, some analysts have said there was a risk that Hilton might not be able to generate enough cash to stay current on its $20 billion of debt. Without a restructuring, Blackstone could have been forced to sell Hilton assets to cover its roughly $900 million in interest payments, according to the analysts.</br></br>A Blackstone spokesman declined to comment.</br></br>A number of large leveraged buyouts -- walloped by the economy and large debt loads -- have managed to stave off default over the past year by restructuring their balance sheets. They've been helped by high-yield markets, which have proven eager to snap up new debt of even the weakest credits.