Blackstone To Restructure HIlton Debt

NEW YORK (Reuters) – Blackstone Group LP (BX.N) is preparing to restructure the debt of Hilton Worldwide Inc, bankrupt investment firm Lehman Brothers Holdings Inc (LEHMQ.PK) said in court filings.

The restructuring would deleverage Hilton’s capital structure by as much as $3.8 billion, Lehman said in the filings, dated Feb. 23.

The plan also proposes extending mortgage loans and senior mezzanine loans for two years and converting about $2 billion of the most junior loans to preferred equity. In addition, Blackstone, Hilton’s parent, would contribute $800 million to repay a portion of the loans taken out to acquire Hilton in 2007.

Lehman said it holds a “small fraction” of the total debt proposed to be restructured, and it has asked the court’s permission to participate. (Reporting by Chelsea Emery; editing by John Wallace)