It’s official: Hilton Worldwide’s mega commercial mortgage backed securitization weighs in at $3.5 billion. That would make it the largest CMBS since the credit crisis.

Hilton, which was taken private by the Blackstone Group in 2007, is in the process of refinancing all of its debt in preparation for an initial public offering of stock. Its IPO registration statement, filed with the Securities & Exchange Commission on Sept.  12, states that it will be issuing loans, bonds and a CMBS, but did not indicate the size of either. However, a presale report on the loans published by Standard & Poor’s today puts the size of the CMBS at $3.5 billion.

Hilton is also seeking  a $6.85 billion senior secured credit facility consisting of a $1 billion revolver due 2018, an $850 million term loan B-1 due 2018, and a $5 billion term loan B-2 due 2020; $1.25 billion of senior secured notes due 2021; $1 billion of senior unsecured notes due 2021; and $1 billion senior unsecured notes due 2023, according to S&P.

Hilton Worldwide is one of the largest hospitality companies in the world, with 4,041 hotels, resorts and timeshare properties comprising 665,667 rooms in 90 countries and territories.

One property that won’t be used as collateral in the CMBS is the Waldorf Astoria in New York; Hilton is seeking a separate bank loan secured by this hotel, according to the firm’s IPO filing.

The deal will hit the CMBS market as the pipeline is filling back up after a late-summer lull. "The pipeline is large and the expected size of the Hilton deal, at least the CMBS component of it, will be record setting for the post-crisis period," said Harris Trifon, director, global head of commercial real estate debt at Deutsche Bank.

"While details regarding the exact structure are scarce at this point, we expect it will be met with good investor demand," he added.


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