XML 40 R23.htm IDEA: XBRL DOCUMENT v3.24.0.1
DEBT AND NON-RECOURSE DEBT
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
DEBT AND NON-RECOURSE DEBT DEBT AND NON-RECOURSE DEBT
Debt
The following table details our outstanding debt balance and its associated interest rates:
December 31,
($ in millions)20232022
Debt(1)
Senior secured credit facility
Term loan with a rate of 8.213%, due 2028
$1,271 $1,284 
Revolver with a rate of 7.360%, due 2026
438 40 
Senior notes with a rate of 5.000%, due 2029
850 850 
Senior notes with a rate of 4.875%, due 2031
500 500 
Other debt33 29 
Total debt, gross3,092 2,703 
Less: unamortized deferred financing costs and discounts(2)(3)
(43)(52)
Total debt, net$3,049 $2,651 
(1)As of December 31, 2023 and 2022, weighted-average interest rates were 6.649% and 6.143%, respectively.
(2)Amount includes unamortized deferred financing costs related to our term loan and senior notes of $21 million and $17 million, respectively, as of December 31, 2023 and $26 million and $19 million, respectively, as of December 31, 2022. This amount also includes unamortized original issuance discounts of $5 million and $7 million as of December 31, 2023, and 2022, respectively.
(3)Amount does not include unamortized deferred financing costs of $3 million and $4 million as of December 31, 2023, and 2022, respectively, related to our revolving facility which are included in Other assets in our consolidated balance sheets.
Senior Secured Credit Facilities
During the year ended December 31, 2023, we repaid $323 million under the senior secured credit facilities. As of December 31, 2023, we had $9 million of letters of credit outstanding under the revolving credit facility and $1 million outstanding backed by cash collateral. We were in compliance with all applicable maintenance and financial covenants and ratios as of December 31, 2023. As of December 31, 2023, we have $553 million remaining borrowing capacity under the revolver facility.
On May 31, 2023, we amended our Credit Facility Agreement to transition from London Interbank Offered Rate (“LIBOR”) reference rates to Secured Overnight Financing Rate (“SOFR”) reference rates. We applied the optional expedients in ASC 848, Reference Rate Reform (“ASC 848”), accounting for the modification as a continuation of the existing contract. Therefore, the transition did not require remeasurement at the modification date or a reassessment of previous accounting determinations, and the change in reference rates will be applied prospectively from the amendment date.
On October 6, 2023, we amended our Term loan under the Senior secured credit facility. Under the amendment, the new interest rate is SOFR plus a spread adjustment of 0.11% plus 2.75%, down from SOFR plus a spread adjustment of 0.11% plus 3.00%. Additionally, the interest rate floor for the Term loan was lowered from 0.50% to 0.00%. During the year ended December 31, 2023, we expensed approximately $2 million in debt issuance costs in connection with the amendment.
We primarily use interest rate swaps as part of our interest rate risk management strategy for our variable-rate debt. These interest rate swaps are associated with the remaining available SOFR based senior secured credit facility. During the second quarter of 2023, we amended our interest rate swap contracts to transition from one-month LIBOR to one-month SOFR as the floating interest rate. The notional amount of the amended contracts was $550 million.
As of December 31, 2023, these interest rate swaps convert the SOFR-based variable rate on our Term Loan to average fixed rates of 1.55% per annum with maturities between 2026 and 2028, for the balance on this borrowing up to the notional values of our interest rate swaps. As of December 31, 2023, the aggregate notional values of the interest rate swaps under our Term Loan was $550 million. Our interest rate swaps have been designated and qualify as cash flow hedges of interest rate risk and recorded at their estimated fair value as an asset in Other assets in our consolidated balance sheets. As of December 31, 2023 and 2022, the estimated fair value of our cash flow hedges was $42 million and $63 million, respectively. We characterize payments we make in connection with these derivative instruments as interest expense and a reclassification of accumulated other comprehensive income for presentation purposes. We classify cash inflows and outflows from derivatives that hedge interest rate risk within operating activities in the Consolidated Statements of Cash Flows.
The following table reflects the activity, net of tax, in Accumulated other comprehensive income related to our derivative instruments during the year ended December 31, 2023:
Net unrealized gain on derivative instruments
Balance as of December 31, 2022$48 
Other comprehensive income before reclassifications, net3 
Reclassifications to net income(19)
Balance as of December 31, 2023$32 
Senior Notes due 2029 and 2031
The Senior Unsecured Notes are guaranteed on a senior unsecured basis by certain of our subsidiaries. We are in compliance with all applicable financial covenants as of December 31, 2023.
Non-recourse Debt
The following table details our outstanding non-recourse debt balance and associated interest rates:
 December 31,
($ in millions)20232022
Non-recourse debt(1)
Timeshare Facility with an average rate of 6.420%, due 2025(3)
$400 $98 
Grand Islander Timeshare Facility with an average rate of 6.716%, due 2029
124 — 
HGV Securitized Debt with a weighted average rate of 2.711%, due 2028
— 42 
HGV Securitized Debt with a weighted average rate of 3.602%, due 2032
66 98 
HGV Securitized Debt with a weighted average rate of 2.431%, due 2033
70 101 
HGV Securitized Debt with a weighted average rate of 4.304%, due 2034
118 168 
HGV Securitized Debt with a weighted average rate of 4.826%, due 2037
188 251 
HGV Securitized Debt with a weighted average rate of 5.937%, due 2038
264 — 
HGV Securitized Debt with a weighted average rate of 3.658%, due 2039
95 134 
Grand Islander Securitized Debt with a weighted average rate of 2.965%, due 2029
15 — 
Grand Islander Securitized Debt with a weighted average rate of 3.316%, due 2033
55 — 
Diamond Resorts Owner Trust 2019 with a weighted average rate of 3.255%, due 2032
— 87 
Diamond Resorts Owner Trust 2021 with a weighted average rate of 2.160%, due 2033
87 134 
Total non-recourse debt, gross1,482 1,113 
Less: unamortized deferred financing costs and discounts(2)
(16)(11)
Total non-recourse debt, net$1,466 $1,102 
(1)As of December 31, 2023, and 2022, weighted-average interest rates were 5.095% and 3.539%, respectively.
(2)Amount includes unamortized deferred financing costs of $12 million related to securitized debt only and does not include unamortized deferred financing costs of $2 million and $4 million as of December 31, 2023, and 2022, respectively, relating to the Timeshare Facility included in Other Assets in our consolidated balance sheets. Amount also includes unamortized discount of $4 million related to the Grand Islander securitized debt recognized at the Grand Islander Acquisition Date.
(3)The revolving commitment period of the Timeshare Facility terminates in May 2024; however the repayment maturity date extends 12 months beyond the commitment termination date to May 2025.
The Timeshare Facilities are non-recourse obligations payable solely from the pool of timeshare financing receivables pledged as collateral and related assets. As of December 31, 2023, the Timeshare Facility and the Grand Islander Timeshare Facility have a remaining borrowing capacity of $350 million and $1 million, respectively.
In August 2023, we completed a securitization of approximately $293 million of gross timeshare financing receivables and issued approximately $187 million of 5.72% notes, $79 million of 6.11% notes, and $27 million of 6.94% notes due January 2038. The securitized debt is backed by pledged assets, consisting primarily of a pool of timeshare financing receivables secured by first mortgages, deeds of trust, membership interests or timeshare interests (other than a fee simple interest in real estate) and initially by a $49 million cash deposit. The securitized debt is a non-recourse obligation and is payable solely from the pool of timeshare financing receivables pledged as collateral to the debt. The
proceeds were used to pay down in part some of the existing debt and for other general corporate purposes. Additionally, in connection with the securitization, we incurred $5 million in debt issuance costs.
During the year ended December 31, 2023, we repaid $273 million on the Timeshare Facility, and $421 million on Securitized Debt.
We are required to deposit payments received from customers on the timeshare financing receivables securing the Timeshare Facility and Securitized Debt into depository accounts maintained by third parties. On a monthly basis, the depository accounts are utilized to make required principal, interest and other payments due under the respective loan agreements. The balances in the depository accounts were $48 million and $50 million as of December 31, 2023 and 2022, respectively, and were included in Restricted Cash in our consolidated balance sheets.
Debt Maturities
The contractual maturities of our debt and non-recourse debt as of December 31, 2023, were as follows:
($ in millions)DebtNon-recourse DebtTotal
Year
2024$17 $255 $272 
202517 602 619 
2026453 161 614 
202713 119 132 
20281,228 85 1,313 
Thereafter1,364 260 1,624 
Total$3,092 $1,482 $4,574