– Eliminates short-term debt maturities –
– Fully undrawn revolving line of credit –
– Uses existing swap to hedge facility –
– Closing of the first tranche of provision of the Urban Select service –
– Full Refund of Junior Tickets Not Guaranteed –
PHILADELPHIA, Aug. 05, 2022 (GLOBE NEWSWIRE) — Hersha Hospitality Trust (NYSE: HT) (“Hersha” or the “Company”), owner of luxury and lifestyle hotels in the coastal and resort markets, has today announced the closing of the company on the refinancing of a $500 million senior secured credit facility (the “Credit Facility”) and the closing of the first six tranche of the previously announced divestiture of seven non-essential properties of the Urban Select service (the “USS Portfolio”).
The $500 million credit facility consists of a $400 million term loan and an undrawn revolving line of credit of $100 million. The facilities will bear interest at 2.50% over the applicable SOFR adjusted term. The $500 million credit facility matures in August 2024 and has a 12-month extension option subject to certain conditions, which would result in an extension to the August 2025 maturity. The company used a swap to cover $300 million of the new term loan at a fixed rate of approximately 3.95%. Following refinancing, 72% of the Company’s outstanding debt is either fixed or hedged by various derivative instruments. The Company has a weighted average interest rate of approximately 4.15% on all borrowings with a weighted average term to maturity of approximately 2.7 years.
“We are pleased with our Lending Group’s continued support and constructive view of Hersha’s growth initiatives and strategic direction. The refinancing of our existing credit facilities supports the significant efforts undertaken to optimize our balance sheet and provides additional flexibility to execute our business plan. The refinancing of the credit facility in conjunction with the mortgage refinancings we completed in 2021 meet our short-term maturities. In addition, the use of the existing swap on $300 million of the new term loan is expected to save approximately $10 million in interest expense over the term of the new term loan. said Jay H. Shah, CEO of Hersha.
The Term Loan Refinancing was arranged by Citibank, NA, Wells Fargo Securities, LLC and Manufacturers and Traders Trust Company as Co-Lead Arrangers and Co-Book Managers, with Citibank, NA as Administrative Agent and warranty agent. Wells Fargo Bank, NA and Manufacturers and Traders Trust Company acted as co-syndication agents. Manufacturers and Traders Trust Company, Fifth Third Bank and Wilmington Savings Fund Society, FSB acted as co-documentation agents. Other participating lenders include Goldman Sachs Bank USA, Raymond James Bank, NA, The Huntington National Bank and The Provident Bank.
Urban Select Service Layout
The Company previously announced the impending sale of the USS portfolio. On August 4, 2022, we completed the sale of six of these USS Portfolio properties for gross proceeds of approximately $435.9 million.
The closure of the 145-room Courtyard in Sunnyvale, Calif., is expected to complete at a later date due to the timing of the CMBS loan takeover process for this asset.
Hersha Host Trust (HT) is a self-administered hospitality real estate investment trust, which owns and operates luxury and lifestyle hotels in the coastal and resort markets. The company’s 30 hotels totaling 4,544 rooms are located in New York, Washington, DC, Boston, Philadelphia, South Florida and select West Coast markets. The Company’s common stock trades on the New York Stock Exchange under the symbol “HT”. For more information about the Company and the Company’s portfolio of hotels, please visit the Company’s website at www.hersha.com
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and, as such, may involve known and unknown risks, uncertainties and other factors that may cause results or actual performance differs from that reflected. in the forward-looking statement. These forward-looking statements may include statements relating to, among other things, the Company’s access to capital on the terms and timing expected by the Company and the Company’s expectations regarding future interest rates. Forward-looking statements are generally identifiable by the use of forward-looking terms such as “believe”, “could”, “intend”, “intend”, “expect”, “anticipate”, “expect”, “project”, ” likely “. , “”estimate”, “plan”, “continue”, “intend”, “should”, “may”, and words of similar significance. Because these forward-looking statements relate to future events, the plans , strategies, prospects and future financial performance of the Company, and involve known and unknown risks which are difficult to predict and may be beyond the control of the Company, they do not constitute guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, you should not rely on any such forward-looking statements. For a description of factors that could cause a difference between the actual results or performance of the Company and its forward-looking statements, please see the information under the heading “Risk Factors ue” included in the Company’s most recent Annual Report on Form 10-K and subsequent quarterly reports. Reports on Form 10-Q filed by the Company with the Securities and Exchange Commission (“SEC”) and other documents filed by the Company with the SEC from time to time. All information provided in this press release, unless otherwise indicated, is as of August 4, 2022, and the Company undertakes no obligation to update such information except as required by law.
|Contact:||Ashish Parikh, Chief Financial Officer|
|Andrew Tamaccio, Head of Investor Relations and Finance|
|Phone: (215) 238-1046|