Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt

Debt

Our debt consists of the following ($ in thousands):

			Outstanding Balance as of
	Interest Rate	Maturity Date	December 31, 2021		December 31, 2020
Senior Secured Credit Facilities
Revolving Credit Facility (1)	LIBOR + 3.00% LIBOR + 4.00%	April 27, 2022 ($17.0 million) January 27, 2024 ($68.0 million)	$	—	$	84,667
Term Loan (2)	LIBOR + 2.75%	April 27, 2024	941,868		976,348
Term A1 Loan	11.4777%	April 27, 2024	35,000		35,000
Term A2 Loan	11.4777%	April 27, 2024	31,000		31,000
Term A3 Loan (3)	LIBOR + 3.00%	April 27, 2024	27,319		28,000
Total Senior Secured Credit Facilities (at stated value)			1,035,187		1,155,015
Unamortized discount			(1,153)		(1,658)
Unamortized debt issuance costs			(4,207)		(6,015)
Total Senior Secured Credit Facilities, net			$	1,029,827	$	1,147,342
Property Loan
Property Loan (at stated value)	9.25%	July 1, 2025	$	110,000	$	110,000
Unamortized discount			(3,107)		(3,960)
Unamortized debt issuance costs			(3,459)		(4,409)
Total Property Loan, net			$	103,434	$	101,631
Finance lease obligations (4)			$	6,058	$	2,294
Total debt, net			$	1,139,319	$	1,251,267

_______

(1)Undrawn balances bear interest between 0.25% to 0.5% depending on certain leverage ratios. We had $85.0 million and $0.3 million available as of December 31, 2021 and 2020, respectively. The weighted-average interest rate on the outstanding balance was 3.15% as of December 31, 2020, based on the one-month London Interbank Offered Rate (“LIBOR”).

(2)One-month LIBOR is subject to a 1.0% floor. The effective interest rate was 3.75% as of both December 31, 2021 and 2020. Our two interest rate swaps fix LIBOR at 2.85% on $800.0 million of our Term Loan (see Note 14).

(3)One-month LIBOR is subject to a 1.0% floor. The effective interest rate was 4.00% as of December 31, 2021 and 2020.

(4)Interest expense for our finance leases was $0.3 million and $0.1 million for the years ended December 31, 2021 and 2020, respectively. We had no finance leases during the year ended December 31, 2019.

Aggregate debt maturities for future annual periods are as follows ($ in thousands):

	As of December 31, 2021
	Senior Secured Credit Facilities		Property Loan
2022	$	10,100	$	—
2023	10,100		—
2024	1,014,987		—
2025	—		110,000
2026	—		—
Thereafter	—		—
Total debt maturities	$	1,035,187	$	110,000

Senior Secured Credit Facility

Playa Resorts Holding B.V., a subsidiary of ours, holds a senior secured credit facility (“Senior Secured Credit Facility”), which consists of a term loan facility which is scheduled to mature on April 27, 2024 (“Term Loan”) and a revolving credit facility which was originally scheduled to mature on April 27, 2022 (“Revolving Credit Facility”) (see discussion of amendments below). The Term Loan bears interest at a rate per annum equal to LIBOR plus 2.75% (where the applicable LIBOR rate has a 1.0% floor). The Revolving Credit Facility bears interest at LIBOR plus 3.00%. We are required to pay a commitment fee ranging from 0.25% to 0.5% per annum on the average daily undrawn balance of the Revolving Credit Facility.

The obligations under the Senior Secured Credit Facility are guaranteed by (a) substantially all of our material subsidiaries, subject to certain exceptions and (b) the Company on a limited recourse basis, with such guaranty being collateralized by a lien on our ordinary shares.

The obligations are further collateralized by, among other things, a lien on (i) all resorts located in Mexico, (ii) certain personal property associated with such resort properties and (iii) pledges of equity interests in certain of our subsidiaries that directly or indirectly own equity interests in any resort property or certain management companies.

Fourth Amendment to Amended and Restated Credit Agreement

On June 12, 2020, we entered into the Fourth Amendment to the Amended & Restated Credit Agreement (the “Fourth Amendment”). The terms of the Senior Secured Credit Facility remain in effect except for the following terms modified by the Fourth Amendment:

i.replace the total net leverage ratio requirement of the financial covenant with a minimum liquidity test until September 30, 2021 (the “Fourth Amendment Relief Period”);

ii.modify the financial covenant for certain test dates after the Fourth Amendment Relief Period; and

iii.add certain restrictions on, among other things, the incurrence of additional debt and making of investments, dispositions and restricted payments during the Fourth Amendment Relief Period.

Fifth Amendment to Amended and Restated Credit Agreement

On February 5, 2021, we entered into the Fifth Amendment to the Amended & Restated Credit Agreement (the “Fifth Amendment”, and collectively with the unamended terms of the Senior Secured Credit Facility, the “Existing Credit Agreement”). The terms of the Senior Secured Credit Facility remain in effect except for the following terms modified by the Fifth Amendment:

i.extend the maturity date for $68.0 million of our $85.0 million Revolving Credit Facility through January 2024. The remaining $17.0 million matures in April 2022;

ii.repaid the $84.7 million outstanding balance on our Revolving Credit Facility as a condition to maturity extension;

iii.increase the interest rate on the extended portion of our Revolving Credit Facility to LIBOR plus an applicable margin of 4.00%;

iv.extend the replacement of the total net leverage ratio requirement of the financial covenant with a minimum liquidity balance through March 31, 2022 (the “Relief Period”);

v.further modify the financial covenant for certain test dates after the Relief Period; and

vi.add certain restrictions on, among other things, the incurrence of additional debt and making of investments, dispositions and restricted payments during the Relief Period and thereafter.

Additional Credit Facility

On June 12, 2020, we entered into an additional senior secured credit facility with an average interest rate of 9.25% that matures on April 27, 2024 and ranks pari passu with the Existing Credit Agreement (the “Additional Credit Facility”). The Additional Credit Facility consists of the following term loans:

i.$35.0 million term loan at fixed rate of 11.4777% (the “Term A1 Loan”);

ii.$31.0 million term loan at fixed rate of 11.4777% (the “Term A2 Loan”); and

iii.$28.0 million term loan at our option of either a base rate plus a margin of 2.00% or LIBOR plus 3.00% (the “Term A3 Loan”). Term A3 Loan is a Eurocurrency loan subject to a 1.00% LIBOR floor consistent with the Existing Credit Agreement.

We used the proceeds from the Additional Credit Facility for general corporate purposes. The obligations under the Additional Credit Facility are collateralized in a manner that is substantially identical to the Existing Credit Agreement.

Prior to the maturity date, the Additional Credit Facility does not require principal payments, but does include mandatory prepayment requirements for the Term A3 Loan that are consistent with the Existing Credit Agreement. Mandatory prepayments are required for certain asset sales, casualty events and condemnation events that are not reinvested in our business where our total net leverage ratio is above 4.00x. We may not voluntarily prepay any portion of the Additional Credit Facility prior to June 2023 without paying a make-whole premium equal to 100% of the interest that would have otherwise accrued from the date of such payment through June 2022 plus 50% of the interest that otherwise would have accrued from June 2022 to June 2023. Subsequent to June 2023, we may prepay any portion of the Additional Credit Facility without penalty.

In connection with the Additional Credit Facility, we terminated the then-remaining $15.0 million of unused capacity of our Revolving Credit Facility under the Senior Secured Credit Facility. The Additional Credit Facility contains covenants, including a springing financial maintenance covenant, identical to those contained in the Senior Secured Credit Facility.

Second Amendment to Additional Credit Facility

On February 5, 2021, we entered into the Second Amendment to the Additional Credit Facility (the “Second Amendment”). The terms of the Additional Credit Facility remain in effect except for the following terms modified by the Second Amendment:

i.extend the Relief Period through March 31, 2022;

ii.further modify the financial covenant for certain test dates after the Relief Period; and

iii.add certain restrictions on, among other things, the incurrence of additional debt and making of investments, dispositions and restricted payments during the Relief Period and thereafter.

Property Loan

On June 12, 2020, we entered into a property loan agreement in the amount of $110.0 million that has a fixed interest rate of 9.25% and matures on July 1, 2025 (the “Property Loan”). Prior to maturity, the Property Loan does not require principal payments. The Property Loan is collateralized by the mortgages of our Hyatt Ziva and Hyatt Zilara Cap Cana properties located in the Dominican Republic and the Hilton Rose Hall Resort & Spa located in Jamaica (collectively the “Properties”). We intend to use the proceeds of the Property Loan to finance the operation and management of the Properties and for general corporate purposes. We may not voluntarily prepay any portion of the Property Loan prior to July 1, 2023 without paying a make-whole premium equal to 100% of the amount of interest that would have otherwise accrued from the date of such payment through July 1, 2022 plus 50% of the interest that otherwise would have accrued from the prepayment date to July 1, 2023. Subsequent to July 2023, we may prepay any portion of the Property Loan without penalty.

During the term of the Property Loan, we are required to deposit certain cash reserves including reserves for operating expenses, debt service and certain property improvement plan required work. We will continue to fund the reserves until the Properties achieve a debt service coverage ratio of 1.50x for two consecutive calendar quarters. These reserves are presented as restricted cash on our Consolidated Balance Sheet and had a balance of $23.5 million as of December 31, 2021.

Finance lease obligation

On July 1, 2020, we entered into a twelve-year finance lease arrangement with a third-party for the construction, management and maintenance of a thermal energy plant located at the Hyatt Ziva and Hyatt Zilara Cap Cana. We recognized a $2.3 million right-of-use asset and lease liability within property and equipment, net and debt, respectively, on the Consolidated Balance Sheet.

On October 1, 2021, we entered into a ten-year finance lease arrangement with a third-party for the construction, management and maintenance of a thermal energy plant located at the Hilton La Romana. We recognized a $3.9 million right-of-use asset and lease liability within property and equipment, net and debt, respectively, on the Consolidated Balance Sheet.

Financial maintenance covenants

We were in compliance with all applicable covenants as of December 31, 2021. A summary of our applicable covenants and restrictions is as follows:

Debt	Covenant Terms
Existing Credit Agreement	We are required to maintain a minimum liquidity balance of $70.0 million through the Relief Period. If we have more than 35% drawn on the Revolving Credit Facility for periods subsequent to December 31, 2021, we will be subject to the following total net leverage ratio requirements: ▪6.50x for the period ended March 31, 2022; ▪6.00x for the period ended June 30, 2022; and ▪4.75x for periods thereafter.
Term A1 Loan	Same terms as the Existing Credit Agreement.
Term A2 Loan	No applicable debt covenants.
Term A3 Loan	No applicable debt covenants.
Property Loan	No applicable debt covenants other than the requirement to maintain a cash reserve until the Properties achieve a debt service coverage ratio of 1.50x for two consecutive quarters.