Marriott to offer public $150 million in notes

April 25, 1991|By Maria Mallory

Marriott Corp. notified the Securities and Exchange Commission Tuesday that it is planning to offer $150 million in notes to the public, the proceeds of which will be "used for general corporate purposes, including repaying debt and financing capital expenditures," the company announced yesterday.

The Liquid Yield Option Notes (LYONs), as they are called by underwriter Merrill Lynch & Co., are zero-coupon subordinated notes, a class of debt that generally pays no interest until the maturity date of the bonds.

Marriott's LYONs, due in 2006, will be convertible into Marriott common stock, the company said.

It's been almost three years since Marriott's last debt offering, according to David N. Chichester, vice president of corporate finance at the Bethesda-based lodging company.

Marriott, which is in the process of a major restructuring, has announced several options for shoring up its liquidity in recent months.

This latest move is one way of accessing additional cash, said Edward Eyring, who is an analyst with New York-based Argus Research Corp.

As of the end of 1990, Marriott's debt load was $3.5 billion, largely due to the expense of rapid expansion in the last few years.

"We have plenty of liquidity right now. This is another form of debt that will pay off existing debt," Mr. Chichester said.

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