Hilton Resolves Insurance Situation

Hilton Hotels Corporation (NYSE:HLT) said today that, relative to an event reported in its second quarter 10-Q, it has resolved a property insurance issue with the servicer of its 7.95 percent collateralized mortgage bonds due 2010 ($490 million outstanding principal balance at June 30, 2002).
As reported in the 10-Q, the servicer of the bonds asserted that an event of default arose due to an exclusion for terrorist acts. While Hilton disputed whether the insurance was required, the company decided to obtain insurance to resolve the dispute. The company`s purchase of insurance in the aggregate of $250 million covering certain terrorist events has, Hilton said, resolved the matter by curing this asserted default.