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InterContinental Hotels Group extends debt agreement with lenders
StockMarketWire.com
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InterContinental Hotels Group (IHG) says it has extended its debt agreement with lenders.
In April, the company amended its existing $1.35 billion syndicated and bilateral revolving credit facilities (RCF) to include a waiver of existing covenants at 30 June 2020, 31 December 2020 and 30 June 2021.
The new amendment includes a waiver of the covenants at 31 December 2021, together with a relaxation to the covenants at 30 June 2022 and 31 December 2022.
The leverage ratio covenant has been amended to require Net Debt to EBITDA of less than 7.5:1 at 30 June 2022 and less than 6.5:1 at 31 December 2022. The interest cover covenant has been amended to require a ratio of above 1.5:1 at 30 June 2022 and above 2.0:1 at 31 December 2022.
The covenant relaxations have been based on a theoretical severe downside scenario.
Ahead of reporting its results for the 2020 financial year, IHG has made changes in income recognised in the System Fund and in its results from reportable segments.
It said it will recognise revenue arising from the licensing of intellectual property under co-brand credit card agreements in its reportable segments within central revenue rather than in the System Fund.
As only the proportion of revenue associated with IHG's intellectual property will move, the vast majority of revenue associated with the cobrand portfolio will continue to be recognised in the System Fund.
It will also recognise the revenue, costs and profit of running the Ambassador programme in the System Fund, rather than IHG's reportable segments.
These changes are effective from 1 January 2020 with amounts recognised in prior years unchanged.
At 2:47pm: (LON:IHG) Intercontinental Hotels Group PLC share price was 0p at 4477p
Story provided by StockMarketWire.com
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