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Ashford Hospitality Trust, Inc. Message Board

  • qksha qksha May 11, 2012 11:56 AM Flag

    new load with high interest rate libor+6.5

    am I reading wrong or what? AHT refinanced with interest of libor+6.5 %, is it harder to get loans now? overall AHT says pays like 4% interests...

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    • Libor is currently zilch plus much more zilch. The loan is currently costing us a mint. It's probably in the neighborhood of what most Tea Party supporters would consider respectful. Guess; 8% plus some fraction I don't remember? Would love it to be so much more lower for the protection of sharolders. But, it is just business. AHT can afford it at the expense of shareholder value. Because we must remind shareholders that AHT is owned by many people and not just by Monty and Larry.

    • Libor is currently zilch plus a little bit. The loan is currently costing them less than the outstanding preferreds. It's probably in the neighborhood of what they were paying on the loan it replaced. Guess; 8% plus some fraction I don't remember? Would love it to be lower, but it's just business. AHT can afford it.

    • Thought it was on the high side as well, but because they mortgage each group of hotels based on the value and outlook for that group and there is no recourse to the company, it must be the best rate they could obtain for those assets.

      One interesting thing they mentioned in the presentation was they difference in valuations in major centres/gateway cities versus the more mid-sized cities, so likely this had something to do with it as well.

 
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