Tuesday, July 22, 2025
Travel + Leisure Co. (NYSE: TNL) today announced that it has completed a substantial term securitization facility, issuing another $300 million of non-recourse, asset-backed notes, furthering the company’s liquidity position. These asset-backed notes are being offered with an overall weighted average coupon of 5.10%, indicative of the strength and stability of Travel + Leisure Co.’s business model. This step will fortify the company’s access to capital and enable it to accelerate its expansion plans.
The executive vice president and chief financial officer of Travel + Leisure Co., Erik Hoag, said: “We are pleased that the transformational transaction is complete. He emphasized the fact that the company can access capital markets even in difficult market conditions, saying, “This transaction again underscores the strength of our business model and our ability to access capital.” The high demand by investors enabled the company to secure favorable terms, which narrows the spread levels throughout the capital structure and delivered an all-in coupon of 5.10%, Hoag added. This is the tightest the company has come in since the start of 2022, which is testament to the company’s capacity to lock in good funding terms in the current market.
Details of the Securitization Transaction
The securitization is being held through Sierra Timeshare 2025-2 Receivables Funding LLC, an indirect subsidiary of Travel + Leisure Co. The deal featured multiple classes of notes with an aggregate principal amount of $300 million. These notes were divided into four classes: Class A Notes, Class B Notes, Class C Notes, and Class D Notes, with each class having its own coupon rate. In particular, the Class A Notes for $143 million bore 4.72% coupon, the Class B Notes of $67 million bore 4.93% coupon, the Class C Notes of $59 million bore 5.32% coupon, and the Class D Notes of $31 million bore 6.79% coupon.
The weighted average coupon at 5.10% indicates the company’s financing at attractive rates, improving its financing agility. Travel + Leisure Co. expects to use the net proceeds from the offering to increase the company’s liquidity and to have additional capital available for potential investments in the future. The company’s success in the securitization market serves as a firm base for future expansion. It is a competitive force in the world travel business and is not one to stand still.
Rule 144A and Regulation S Offered Securities
The securities sold in the offering have been sold under Rule 144A and Regulation S as a part of a placement of securities not registered under the Securities Act of 1933, as amended, or any state securities law. Under the foregoing regulatory system, Travel + Leisure Co. can only raise capital from institutional investors that (i) are capable of buying unregistered securities. Looking to leverage these provisions of the Law, the company was able to raise capital from a large group of savvy investors, all while increasing the number of those it can appeal to in the public markets.
The sale of the securities is now final, and this release is made as a public record for interested investors and parties to the transaction. Although the securities were not registered under the Securities Act, they were sold under the regulations and transparency of the act.
Effect on the Financial Strategy of Travel + Leisure Co.
The $300 million securitization is a significant step for Travel + Leisure Co., helping to fortify the company’s liquidity position and financial flexibility. The deal demonstrates that the company has strong markets that it can raise capital for its business segments, supporting its strategic goals. With the improved capital structure, Travel + Leisure Co. is better equipped to pursue any new opportunities in the travel and leisure sector, as well as navigate the challenges inherent in the broader economic environment.
That the company got a deal at such a favorable price reflects its position as a market leader with strong financial discipline. This securitization transaction re-affirms investors’ confidence in the business model of Travel + Leisure Co. and their long-term growth prospects. As the travel and hospitality sector recovers and transforms, a powerful financial platform is essential to remain competitive and seize growth opportunities.
Future Outlook: Strategic Expansion and Strengthened Growth
Looking to the future, Travel + Leisure Co. has plenty of room to grow as it further penetrates the travel and leisure market. The $300 million securitization transaction is a major milestone in the company’s financial strategy, enabling it to further support its growth and to continue to evolve its business.
Now more than ever, as the company identifies new global opportunities in travel, from acquisitions to investments, the liquidity from this will provide a welcome level of confidence. Whether that’s by expanding its timeshare business, introducing new products, or improving its customer experience, Travel + Leisure Co. is committed to providing lasting value to its constituents.
(Source: Travel + Leisure Co., U.S. Securities and Exchange Commission, Financial Industry Regulatory Authority)
