Marriott Gets $920 Million in Card Deals With AmEx, Chase

(Bloomberg) -- Marriott International Inc. raised $920 million in cash through deals with co-branded credit card companies as it rides out the pause in travel due to the coronavirus.

Marriott, the world's largest hotel company, will get $570 million from JPMorgan Chase & Co. in prepayment of future revenues and the early payment of a previously agreed to signing bonus.

The company is also getting $350 million from American Express in a prepurchase of loyalty points through Marriott's Bonvoy program Both deals include extensions of existing co-branding agreements, according to a statement on Tuesday.

The move comes as hotel companies hoard cash to ride out a public health crisis that has had an major impact on the travel industry. In the U.S. alone, roughly three quarters of hotel rooms are empty, and 70% of lodging workers have been laid off or furloughed. Marriott said in April that it had closed roughly a quarter of its 7,300 hotels.

Marriott shares rose 5.2% to $86.84 on Tuesday. The stock had dropped 45% this year through the close of trading on Monday.

Hilton also recently raised cash through a credit-card deal, preselling $1 billion in loyalty points to American Express.

Marriott, Hilton and Hyatt Hotels Corp. have also tapped bond markets in recent weeks as industry analysts focus on how much cash the companies have to endure the travel shutdown.

Marriott is one of AmEx's largest co-brand partners, with the companies' cards representing 2% of spending on the firm's network and 4% of its loans.

“We think this could be a benefit for AmEx to the extent that the points were purchased at a discount and also deepens its relationship with a large partner,” said Sanjay Sakhrani, an analyst at Keefe Bruyette & Woods, said in a note to clients on Tuesday.