Travel & Leisure Co.TNL
Travel & Leisure Co. Debt Disclosure
Debt
The Company’s indebtedness consisted of the following (in millions):
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Non-recourse vacation ownership debt: (a) | |||||||||||
Term notes (b) | $ | 1,690 | $ | 1,746 | |||||||
USD bank conduit facility (due August 2027) (c) | 318 | 278 | |||||||||
AUD/NZD bank conduit facility (due December 2026) (d) | 116 | 99 | |||||||||
| Total | $ | 2,124 | $ | 2,123 | |||||||
Debt: (e) | |||||||||||
$1.0 billion secured revolving credit facility (due June 2030) (f) | $ | 63 | $ | 196 | |||||||
Secured term loan B (due December 2029) (g) | 854 | 860 | |||||||||
$350 million 6.60% secured notes (due October 2025) (h) | — | 349 | |||||||||
$650 million 6.625% secured notes (due July 2026) | 649 | 648 | |||||||||
$400 million 6.00% secured notes (due April 2027) | 402 | 403 | |||||||||
$650 million 4.50% secured notes (due December 2029)(i) | 646 | 644 | |||||||||
$350 million 4.625% secured notes (due March 2030) | 348 | 347 | |||||||||
$500 million 6.125% secured notes (due September 2033) | 494 | — | |||||||||
| Finance leases | 18 | 21 | |||||||||
| Total | $ | 3,474 | $ | 3,468 | |||||||
(a)Represents non-recourse debt that is securitized through bankruptcy-remote special purpose entities, the creditors of which have no recourse to the Company for principal and interest. These outstanding borrowings (which legally are not liabilities of the Company) are collateralized by $2.40 billion and $2.41 billion of underlying gross VOCRs and related assets (which legally are not assets of the Company) as of December 31, 2025 and 2024.
(b)The carrying amounts of the term notes are net of deferred financing costs of $23 million as of both December 31, 2025 and 2024.
(c)The Company has a borrowing capacity of $600 million under the USD bank conduit facility through August 2027. Borrowings under this facility are required to be repaid as the collateralized receivables amortize but no later than September 2028.
(d)The Company has a borrowing capacity of 200 million Australian dollars (“AUD”) and 25 million New Zealand dollars (“NZD”) under the AUD/NZD bank conduit facility through December 2026. Borrowings under this facility are required to be repaid no later than January 2029.
(e)The carrying amounts of the secured notes and term loan are net of unamortized discounts of $11 million and $15 million as of December 31, 2025 and 2024, and net of unamortized debt financing costs of $16 million and $12 million as of December 31, 2025 and 2024.
(f)The weighted average effective interest rate on facility borrowings was 6.52% and 7.52% as of December 31, 2025 and 2024.
(g)The weighted average effective interest rate on facility borrowings was 6.86% and 7.04% as of December 31, 2025 and 2024.
(h)Includes $1 million of unamortized losses from the settlement of a derivative as of December 31, 2024.
(i)Includes $2 million and $4 million of unamortized gains from the settlement of a derivative as of December 31, 2025 and 2024.
Maturities and Capacity
The Company’s outstanding indebtedness as of December 31, 2025, matures as follows (in millions):
Non-recourse Vacation Ownership Debt (a) | Debt | Total | |||||||||||||||
| Within 1 year | $ | 244 | $ | 666 | $ | 910 | |||||||||||
| Between 1 and 2 years | 241 | 416 | 657 | ||||||||||||||
| Between 2 and 3 years | 450 | 12 | 462 | ||||||||||||||
| Between 3 and 4 years | 197 | 1,474 | 1,671 | ||||||||||||||
| Between 4 and 5 years | 205 | 411 | 616 | ||||||||||||||
| Thereafter | 787 | 495 | 1,282 | ||||||||||||||
| $ | 2,124 | $ | 3,474 | $ | 5,598 | ||||||||||||
(a)Required principal payments on the non-recourse vacation ownership debt are based on the contractual repayment terms of the underlying VOCRs. Actual maturities may differ as a result of prepayments by the VOCR obligors.
As of December 31, 2025, the available capacities under the Company’s borrowing arrangements were as follows (in millions):
Non-recourse Conduit Facilities (a) | Revolving Credit Facilities (b) | ||||||||||
| Total capacity | $ | 748 | $ | 1,000 | |||||||
| Less: outstanding borrowings | 434 | 63 | |||||||||
| Less: letters of credit | — | 44 | |||||||||
| Available capacity | $ | 314 | $ | 893 | |||||||
(a)Consists of the Company’s USD bank conduit facility and AUD/NZD bank conduit facility. The capacities of these facilities are subject to the Company’s ability to provide additional assets to collateralize additional non-recourse borrowings.
(b)Consists of the Company’s $1.0 billion secured revolving credit facility.
Non-recourse Vacation Ownership Debt
As discussed in Note 16—Variable Interest Entities, the Company issues debt through the securitization of VOCRs.
Sierra Timeshare 2025-1 Receivables Funding LLC. On March 19, 2025, the Company closed on a placement of a series of term notes payable, issued by Sierra Timeshare 2025-1 Receivables Funding LLC, with an initial principal amount of $350 million, secured by VOCRs and bearing interest at a weighted average coupon rate of 5.20%. The advance rate for this transaction was 98%. As of December 31, 2025 the Company had $208 million of outstanding borrowings under these term notes, net of debt issuance costs.
Sierra Timeshare 2025-2 Receivables Funding LLC. On July 22, 2025, the Company closed on a placement of a series of term notes payable, issued by Sierra Timeshare 2025-2 Receivables Funding LLC, with an initial principal amount of $300 million, secured by VOCRs and bearing interest at a weighted average coupon rate of 5.10%. The advance rate for this transaction was 98%. As of December 31, 2025, the Company had $224 million of outstanding borrowings under these term notes, net of debt issuance costs.
Sierra Timeshare 2025-3 Receivables Funding LLC. On October 15, 2025, the Company closed on a placement of a series of term notes payable, issued by Sierra Timeshare 2025-3 Receivables Funding LLC, with an initial principal amount of
$300 million, secured by VOCRs and bearing interest at a weighted average coupon rate of 4.78%. The advance rate for this transaction was 98%. As of December 31, 2025, the Company had $265 million of outstanding borrowings under these term notes, net of debt issuance costs.
Term Notes. In addition to the 2025 term notes described above, as of December 31, 2025, the Company had $993 million of outstanding non-recourse borrowings, net of debt issuance costs, under term notes entered into prior to December 31, 2024.
The Company’s non-recourse term notes include fixed rate term notes for which the weighted average interest rate was 6.5%, 6.5%, and 5.6% during 2025, 2024, and 2023.
USD bank conduit facility. On April 17, 2025, the Company renewed its $600 million USD timeshare receivables conduit facility, extending the end of the commitment period from September 2025 to August 2027 and making certain other amendments, including to the advance rate. The facility bears interest based on a mix between the variable commercial paper rates plus a spread and the Daily Simple Secured Overnight Financing Rate (“SOFR”), plus a spread,
AUD/NZD bank conduit facility. The Company has a non-recourse AUD/NZD timeshare receivables conduit facility, with a total capacity of A$200 million and NZ$25 million and is secured by VOCRs, bearing interest at variable rates based on the Bank Bill Swap Bid Rate plus 1.55%. Borrowings under this facility are required to be repaid no later than January 2029. As of December 31, 2025, the Company had $116 million of outstanding borrowings under this facility.
As of December 31, 2025, the Company’s non-recourse vacation ownership debt of $2.12 billion was collateralized by $2.40 billion of underlying gross VOCRs and related assets. Additional usage of the Company’s non-recourse bank conduit facilities is subject to the Company’s ability to provide additional assets to collateralize such facilities. The combined weighted average interest rate on the Company’s total non-recourse vacation ownership debt was 6.6%, 6.8%, and 5.9% during 2025, 2024, and 2023.
Debt
$1.0 billion Revolving Credit Facility and Term Loan B facilities. The Company has a credit agreement with Bank of America, N.A. as administrative agent and collateral agent. The agreement provides for senior secured credit facilities consisting of a Term Loan B facility and a $1.0 billion secured revolving facility.
On June 25, 2025, the Company entered into the seventh amendment to the agreement governing its $1.0 billion revolving credit and term loan B facility (“Seventh Amendment”). The Seventh Amendment refinanced and extended the maturity of the revolving credit facility from October 2026 to June 2030, and among other things:
•Provides that borrowings under the revolving credit facility bear interest at a per annum rate equal to Term SOFR (or in the case of revolving borrowings in other currencies, the applicable interest benchmark for such currency) plus a spread ranging from 1.50% to 2.00%, depending on the Company’s first lien leverage ratio (and with a customary ability to borrow loans bearing interest at a “base rate,” other than Term SOFR, plus a spread from 0.50% to 1.00%), representing an overall reduction in the spread of 25 basis points at all pricing levels.
•Eliminated the “credit spread adjustment” applicable to revolving credit loans, representing a reduction of 11.45 to 71.51 basis points depending on tenor, and reduced the Term SOFR floor applicable to revolving credit loans from 0.50% to 0.00%.
•Reduced the commitment fee for the unused portion of the revolving credit facility. This fee is based on the first-lien leverage ratio and ranges from 0.20% to 0.25% (previously 0.25% to 0.35%) per annum of the unused balance.
•Reduced the minimum interest coverage ratio to 2.00 to 1.00 (previously 2.50 to 1.00).
On December 10, 2025, the Company entered into the eighth amendment to the agreement governing its $1.0 billion revolving credit and term loan B facility (“Eighth Amendment”). The Eighth Amendment refinanced the $869 million outstanding balance of the Term Loan B facility, with interest rate per annum applicable to borrowings under this facility equal to the Term SOFR rate, plus an applicable rate of 2.00% (previously 2.50%). The maturity date of this facility remains December 14, 2029 and the principal amortizes in equal quarterly installments of 0.25% of the principal amount at the time of the amendment.
As of December 31, 2025, the security agreement that exists in connection with the credit agreement names Bank of America N.A. as collateral agent on behalf of the secured parties (as defined in the security agreement) and has been in force since May 31, 2018. The security agreement grants a security interest in the collateral of the Company (as defined in the security agreement) and includes the holders of Travel + Leisure Co.’s outstanding secured notes, as “secured parties.”
These note holders share equally and ratably in the collateral (as defined in the security agreement) owned by the Company for so long as the indebtedness under the credit agreement is secured by such collateral.
Secured Notes
On August 19, 2025, the Company closed on a private offering of secured notes, with a face value of $500 million and an interest rate of 6.125%. Deferred financing costs for this transaction were $6 million, which will be amortized over the life of the notes. Interest is payable semi-annually in arrears. The notes will mature on September 1, 2033, unless earlier redeemed in accordance with their terms. Prior to August 15, 2028, the Company will be entitled at its option to redeem all or a portion of these notes at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus a “make-whole premium” plus any accrued and unpaid interest. At any time on or after August 15, 2028, the Company may redeem all or a portion of the notes at certain redemption prices above their face amount plus any accrued and unpaid interest. On or after August 15, 2030 the Company will be able to redeem the notes at par plus any accrued and unpaid interest. The proceeds of this offering were used to redeem all of the Company’s $350 million 6.6% secured notes due October 2025, toward repayment of outstanding borrowings under the revolving credit facility, to pay the fees and expenses incurred in connection with the issuance, and for general corporate purposes.
Pursuant to the terms of the indenture governing the Company’s rating sensitive $400 million 6.0% notes due 2027, the interest rate on such notes may be subject to future increases or decreases, as a result of future downgrades or upgrades to the credit ratings of such notes by Standard & Poor’s Rating Services (“S&P”), Moody’s Investors Service, Inc., or a substitute rating agency. Since issuance, the interest rates on the related notes have increased 150 basis points as of December 31, 2025, with a maximum potential for additional increase of 50 basis points.
As of December 31, 2025, the Company had $2.05 billion of outstanding secured notes issued prior to December 31, 2024. Interest on these notes is payable semi-annually in arrears. The notes are redeemable at the Company’s option at a redemption price equal to the greater of (i) the sum of the principal being redeemed, and (ii) a “make-whole” price specified in the indenture of the notes, plus, in each case, accrued and unpaid interest. These notes rank equally in right of payment with all of the Company’s other secured indebtedness.
Deferred Financing Costs
The Company classifies debt issuance costs related to its revolving credit facilities and the bank conduit facilities within Other assets on the Consolidated Balance Sheets. Such costs were $8 million and $5 million as of December 31, 2025 and 2024.
Debt Covenants
The revolving credit facility and term loan B facility are subject to covenants including the maintenance of specific financial ratios as defined in the credit agreement. The financial ratio covenants consist of a minimum interest coverage ratio of 2.00 to 1.0 as of the measurement date and a maximum first lien leverage ratio of 4.25 to 1.0 as of the measurement date. The interest coverage ratio is calculated by dividing consolidated EBITDA (as defined in the credit agreement) by consolidated interest expense (as defined in the credit agreement), both as measured on a trailing 12-month basis preceding the measurement date. The first lien leverage ratio is calculated by dividing consolidated first lien debt (as defined in the credit agreement) as of the measurement date by consolidated EBITDA (as defined in the credit agreement) as measured on a trailing 12-month basis preceding the measurement date.
As of December 31, 2025, the Company’s interest coverage ratio was 4.92 to 1.0 and the first lien leverage ratio was 3.06 to 1.0. These ratios do not include interest expense or indebtedness related to any qualified securitization financing (as defined in the credit agreement). As of December 31, 2025, the Company was in compliance with the financial covenants described above.
Each of the Company’s non-recourse securitized term notes and bank conduit facilities contain various triggers relating to the performance of the applicable loan pools. If the VOCR pool that collateralizes one of the Company’s securitization notes fails to perform within the parameters established by the contractual triggers (such as higher default or delinquency rates), there are provisions pursuant to which the cash flows for that pool will be maintained in the securitization as extra collateral for the note holders or applied to accelerate the repayment of outstanding principal to the note holders. As of December 31, 2025, all of the Company’s securitized loan pools were in compliance with applicable contractual triggers.
Interest Expense
The Company incurred interest expense of $232 million, $249 million, and $251 million during 2025, 2024, and 2023 excluding interest expense associated with non-recourse vacation ownership debt. These amounts include offsets of $1
million, $1 million, and less than $1 million of capitalized interest during 2025, 2024, and 2023. Cash paid related to such interest was $213 million, $245 million, and $239 million during 2025, 2024, and 2023.
Interest expense incurred in connection with the Company’s non-recourse vacation ownership debt was $135 million, $136 million, and $112 million during 2025, 2024, and 2023, and is reported within Consumer financing interest on the Consolidated Statements of Income. Cash paid related to such interest was $111 million, $113 million, and $82 million during 2025, 2024, and 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 22, 2023 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.