Hilton Announces Strategic Financial Transactions to Reduce Debt, Extend Maturities

Hilton Hotels Corporation (NYSE:HLT) today announced three separate transactions consistent with the company`s financial strategies of reducing debt and extending maturities:

*Hilton sold $375 million of 10-year Senior Unsecured Notes with settlement and closing scheduled for November 22, 2002. The notes carry a coupon of 7.625 percent and have a maturity date of December 1, 2012. Proceeds from the sale will be used to repay indebtedness under the company`s revolving credit facility. Book runners on the transaction were Morgan Stanley and UBS Warburg, with Credit Suisse First Boston serving as co-lead.
*The company sold $67 million in timeshare notes receivable to a wholly owned subsidiary of GE Capital. Proceeds from the sale will be used to reduce corporate debt. This represents the second tranche to be sold to GE; the first tranche of approximately $52 million was sold June 27, 2002. Approximately $90 million of timeshare receivables currently remain in Hilton`s portfolio.
*Hilton also announced that it has received commitments necessary to renew its $150 million 364-day revolving credit facility. The facility is scheduled to close November 26, 2002, with no change in fees or borrowing rates. Bank of America Securities acted as Lead Agent and Arranger on the renewal.

Mariel A. Joliet, Hilton`s senior vice president and treasurer, said: “The bond sale represented a successful and timely capital market execution, and we were very pleased with the reception in the marketplace. We are happy to have completed another sale of timeshare receivables to GE Capital on excellent terms. The renewal of our 364-day facility demonstrates the support that Hilton enjoys in the banking community. Taken together, these three transactions are important steps in advancing our financial goals of reducing debt and extending maturities.”