Marriott Vacations Worldwide Corporation (NYSE:VAC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement

Revolving Corporate Credit Facility

On August16, 2017, Marriott Vacations Worldwide Corporation (the “Company”) and certain of its subsidiaries entered into several agreements relating to a new revolving credit facility (the “Revolving Corporate Credit Facility”), including (1)a Credit Agreement, dated as of August16, 2017 (the “Credit Agreement”), among the Company, its subsidiary Marriott Ownership Resorts, Inc. (the “Borrower” or “MORI”), the several banks and other financial institutions or entities from time to time parties to the Credit Agreement (the “Lenders”) and JPMorgan Chase Bank, N.A., as administrative agent (“JPMorgan”), and (2)a Guarantee and Collateral Agreement, dated as of August16, 2017 (the “Guarantee and Collateral Agreement”), made by the Company, the Borrower and certain other subsidiaries of the Company in favor of JPMorgan as administrative agent for the Lenders.

The borrowing capacity of the Credit Agreement is $250 million, including a letter of credit sub-facility of $30 million. The Credit Agreement will provide support for the Company’s business, including ongoing liquidity and letters of credit. Borrowings under the Credit Agreement will generally bear interest at a floating rate plus an applicable margin that varies from 0.50 percent to 2.75 percent depending on the type of loan with corresponding base rate selected by the Company and the Company’s credit rating. In addition, the Borrower will pay a commitment fee on the unused availability under the Credit Agreement at a rate that varies from 20 basis points per annum to 40 basis points per annum, also depending on the Company’s credit rating.

The Credit Agreement contains affirmative and negative covenants and representations and warranties customary for financings of this type. In addition, the Credit Agreement contains financial covenants, including covenants requiring the Company to maintain (1)a maximum ratio of consolidated secured net debt to consolidated adjusted EBITDA (as defined in the Credit Agreement) of 2.00 to 1.00, and (2)a minimum ratio of consolidated adjusted EBITDA to consolidated interest expense of 3.00 to 1.00.

to the Guarantee and Collateral Agreement, the obligations of the Borrower under the Credit Agreement are guaranteed by the Company and by each of its direct and indirect, existing and future, domestic subsidiaries (excluding certain special purpose subsidiaries), and are secured by a perfected first priority security interest in substantially all of the assets of the Company and the guarantors, subject to certain exceptions.

Amendment of Warehouse Credit Facility

On August17, 2017, the Company and certain of its subsidiaries entered into Omnibus Amendment No.6 (the “Warehouse Amendment”) to the Third Amended and Restated Standard Definitions that are attached or incorporated by reference into certain of the agreements associated with the $250 million warehouse credit facility that the Company and certain of its subsidiaries amended and restated in September 2014 (the “Warehouse Credit Facility”), including, among others: (1)the Third Amended and Restated Indenture and Servicing Agreement, dated as of September1, 2014, by and among Marriott Vacations Worldwide Owner Trust 2011-1 (the “Trust”), MORI, and Wells Fargo Bank, National Association (“Wells Fargo”); and (2)the Second Amended and Restated Sale Agreement, dated as of September1, 2014, by and between the Company’s subsidiary MORI SPC Series Corp. and the Trust.

The Warehouse Credit Facility allows for the securitization of vacation ownership notes receivable on a non-recourse basis. From time to time, MORI SPC Series Corp. will sell to the Trust vacation ownership notes receivable that it purchases from MORI. to the Indenture, the Trust will pledge such vacation ownership notes receivable to a trustee to secure notes issued by the Trust. The advance rate for vacation ownership notes receivable securitized using the Warehouse Credit Facility varies based on the characteristics of the securitized vacation ownership notes receivable. Prior to the execution of the Warehouse Amendment, the Company was required to the Warehouse Credit Facility to comply with the financial covenants included in the Prior Credit Agreement (as defined below); the Warehouse Amendment provides that the Company will be required to comply with certain financial covenants in the Credit Agreement.

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The descriptions of the Credit Agreement, the Guarantee and Collateral Agreement and the Warehouse Amendment above are qualified in their entirety by reference to the full text of such agreements, which are filed as exhibits to this Current Report on Form 8-K and are hereby incorporated by reference.

Item 1.01 Termination of a Material Definitive Agreement.

On August16, 2017, in connection with the entry into the Credit Agreement, all amounts outstanding under the Second Amended and Restated Credit Agreement, dated as of September10, 2014 (as amended, the “Prior Credit Agreement”), among the Company, the Borrower, the several banks and other financial institutions or entities from time to time parties thereto, JPMorgan, as administrative agent, Bank of America, N.A. and Deutsche Bank Securities Inc., as co-syndication agents, and Bank of America, N.A. and Deutsche Bank Securities Inc., as co-documentation agents, relating to a $200 million revolving credit facility (the “Prior Revolving Corporate Credit Facility”), were repaid in full, all commitments to make extensions of credit thereunder were terminated, all security interests and guarantees in connection therewith,

including those to the Second Amended and Restated Guarantee and Collateral Agreement, dated as of September10, 2014 (the “Prior Guarantee and Collateral Agreement”), made by the Company, the Borrower and certain subsidiaries of the Company in favor of JPMorgan, as administrative agent for the banks and other financial institutions or entities from time to time parties to the Prior Credit Agreement, were terminated or released. The Prior Guarantee and Collateral Agreement and other agreements entered into in connection with the Prior Revolving Corporate Credit Facility were also terminated as of August16, 2017.

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From time to time, JPMorgan and the other financial institutions that are party to the Credit Agreement, or were party to the Prior Credit Agreement, and the financial institutions that provide funding to the Warehouse Credit Facility, or their respective affiliates, may have performed, and may in the future perform, various commercial banking, investment banking and other financial advisory services for the Company and its affiliates for which they have received or will receive customary fees and expenses. In particular, (1)some of the financial institutions that are party to the Credit Agreement or were party to the Prior Credit Agreement or their affiliates participate, or may in the future participate, in the Warehouse Credit Facility, (2)some of the financial institutions that provide funding to the Warehouse Credit Facility may be party to the Credit Agreement or may have been party to the Prior Credit Agreement, and (3)any of such financial institutions may also have participated, or may in the future participate, in transactions involving the securitization of vacation ownership notes receivable undertaken by the Company’s subsidiaries. Wells Fargo also serves as the trustee and, in some cases, the back-up servicer, with respect to certain transactions involving the securitization of vacation ownership notes receivable undertaken by the Company’s subsidiaries.

Item 1.01 Financial Statements and Exhibits.

(d) Exhibits.

MARRIOTT VACATIONS WORLDWIDE Corp Exhibit
EX-10.1 2 d440518dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 EXECUTION VERSION       $250,…
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About Marriott Vacations Worldwide Corporation (NYSE:VAC)

Marriott Vacations Worldwide Corporation is a developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. The Company is a developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Destination Club brand. The Company develops, markets and sells whole ownership residential products under The Ritz-Carlton Residences brand. The Company operates through three segments: North America, Europe and Asia Pacific. The Company’s portfolio consists of approximately 60 properties in the United States and over eight other countries and territories. The Company’s brands include The Marriott Vacation Club, Grand Residences by Marriott, The Ritz-Carlton Destination Club and The Ritz-Carlton Residences. The Company also offers purchase money financing for purchasers of its vacation ownership products.