InterContinental Hotels Group (LON:IHG) has today provided a financing update including a waiver of existing banking covenants and provision of additional facilities through the UK Covid Corporate Financing Facility (CCFF), alongside an update to current trading.
Financing update
IHG has secured new financing arrangements to further strengthen its liquidity position.
This includes amending its syndicated revolving credit facility to include a waiver of existing covenants until 31 December 2021. The amendment introduces a minimum liquidity covenant of $400m, tested at half year and full year, up to and including 30 June 2021 (see note 1 below for further details).
The Bank of England has also now confirmed IHG as an eligible issuer for the UK Government’s CCFF, and IHG has issued £600m (~$740m) in commercial paper under this facility.
IHG now has access to $1.35bn of cash on deposit and existing bank facilities are currently $660m undrawn, taking total available liquidity to ~$2bn.
Current trading
When we announce our First Quarter 2020 trading update on 7 May, we expect to report that Q1 Global RevPAR decreased approximately 25%, including a 55% decline in March, in line with the Business Update we provided on 20 March. Trading in Greater China continues to steadily improve, with only 12 out of 470 hotels now closed. In the US, ~10% of our hotels are currently closed, demonstrating the resilience of our mainstream, franchised business, and, in EMEAA, ~50% of hotels are currently closed. Occupancy levels in comparable open hotels are currently in the low to mid 20% range across the business.
InterContinental Hotels Group will provide a fuller update on 7 May with our First Quarter 2020 trading update.
