- Enters into Fixed Rate Swaps on Remaining $400.9M of Term Loans -
- Eliminates All Near Term Debt Maturities -
- 90% of Outstanding Debt Fixed or Hedged -
PHILADELPHIA, Sept. 10, 2019 (GLOBE NEWSWIRE) -- Hersha Hospitality Trust (HT) (“Hersha” or the “Company”), owner of high-quality upscale, luxury and lifestyle hotels in urban gateway markets and resort destinations, today announced the Company closed on the refinancing of its $300 million Senior Unsecured Term Loan (“The Term Loan”). The Company also entered into a series of new swap contracts to fix the interest rates on the remaining $400.9M of Senior Unsecured Term Loans.
“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 term loan sustains the significant efforts undertaken to optimize our balance sheet and provides additional flexibility to execute our business plan. Furthermore, the term loan refinancing and new interest rate swap agreements, in conjunction with the mortgage refinancings we completed at our Hyatt Union Square and Hilton Garden Inn Tribeca, addresses all of our 2019 and 2020 debt maturities, resulting in estimated interest expense savings of $2.2 million for the remainder of 2019 and $6.7 million in 2020. These transactions have also resulted in the elimination of all debt maturities until 2021,” stated Jay H. Shah, Hersha’s Chief Executive Officer.
The $300 million Term Loan’s interest rate was swapped from LIBOR plus 185 basis points to a fixed rate of 3.31% and matures in 5 years. In addition, the Company took advantage of the current rate environment and entered into fixed rate swaps on several of the term loans maturing in the 2021 and 2022 and effectively fixed the interest rate of those term loans at 3.53% and 4.02%, respectively. Following the refinancings, 90% of the Company’s outstanding debt is either fixed or hedged through various derivative instruments. The Company has a weighted average interest rate of 3.9% across all borrowings with a weighted average life-to-maturity of approximately 4 years.
The Term Loan refinancing was arranged by Citibank, N.A. and Wells Fargo Securities, LLC as Joint Lead Arrangers and Joint Book Running Managers, with Citibank, N.A. as Administrative Agent and Wells Fargo Bank, National Association as Syndication Agent. Bank of America, N.A., BMO Harris Bank N.A., BBVA USA, Fifth Third Bank, Goldman Sachs Bank USA, Manufacturers and Trading Trust Company, Raymond James Bank, N.A. and TD Bank, N.A. acted as Co-Documentation Agents. First Commercial Bank, Ltd. and The Huntington National Bank acted as Senior Managing Agents. Other participating lenders included Wilmington Savings Fund Society, FSB and The Provident Bank.
Hersha Hospitality Trust (HT) is a self-advised real estate investment trust in the hospitality sector, which owns and operates high quality upscale, luxury and lifestyle hotels in urban gateway markets and resort destinations. The Company's 48 hotels totaling 7,644 rooms are located in New York, Washington, DC, Boston, Philadelphia, South Florida and select markets on the West Coast. The Company's common shares are traded on The New York Stock Exchange under the ticker “HT”. For more information on the Company, and the Company’s hotel portfolio, please visit the Company's website at www.hersha.com
Forward Looking Statement
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 the actual results or performance to differ from those reflected in the forward-looking statement. For a description of these factors, please review the information under the heading “Risk Factors” included in Hersha Hospitality Trust’s filings with the U.S. Securities and Exchange Commission Annual Report on Form 10-K for the year ended December 31, 2018 and subsequent reports filed by the Company with the Securities and Exchange Commission from time to time.
Ashish Parikh, Chief Financial Officer
Greg Costa, Manager of Investor Relations & Finance
Phone: (215) 238-1046