Sources told Thomson Reuters, Hilton Worldwide is in the midst of preparing a debt financing package worth USD 12 billion. The refinancing deal is set to be completed ahead of its initial public offering slated sometime in the first half of next year. The package would include a mix of leveraged loans, high yield bonds and mortgage backed securities. A revolving credit facility would also form part of the package. An estimated USD 5 billion to USD 6 billion of the refinancing package would come in the form of covenant-lite leveraged loans.

The refinancing talks are led by Deutsche Bank and Bank of America Merrill Lynch. Banking giants Goldman Sachs and Morgan Stanley also play major roles in the hotel group's refinance package. Sources also told Reuters earlier that Hilton's initial public offering would be led by Deutsche Bank, Goldman Sachs Group, Bank of America and Morgan Stanley. The banks, however, have not issued any official statement on the financing package as of press time. The Blackstone Group made Hilton private in a transaction worth USD 26.7 billion in 2007.