Travelodge sets initial talk for £550 million equivalent two-part secured notes; pricing Friday

By Paul A. Harris

Portland, Ore., April 20 – Travelodge Hotels Ltd. set initial price talk in its £550 million equivalent two-part offering of TVL Finance plc five-year senior secured notes on Thursday, according to market sources.

The Rule 144A and Regulation S deal features a sterling-denominated tranche of fixed-rate notes with two years of call protection with initial price talk 10¾% to 11%.

The offering also features a euro-denominated tranche of floating-rate notes with one year of call protection and initial talk of Euribor plus 550 basis points at an original issue discount of 96 to 97.

Tranche sizes remain to be determined.

The deal is set to price on Friday.

Goldman Sachs and Barclays are leading the notes sale.

The Thame, U.K.-based hospitality company plans to use the proceeds plus cash on hand to redeem its outstanding senior secured fixed- and floating-rate notes in their entirety and to indirectly repay a portion of capitalized interest on certain subordinated shareholder loans.

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