Summit Hotel Properties closes new increased USD600m credit facility.
M2 EQUITYBITES-December 11, 2018-Summit Hotel Properties closes new increased USD600m credit facility
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Summit Hotel Properties Inc (NYSE:INN) revealed on Monday that it closed on the new unsecured credit facility worth USD600m that consists of a USD400m unsecured revolving line of credit and a USD200m unsecured term loan, increased from its existing USD450m unsecured credit facility.
Also, the company said that this USD400m revolving line of credit matures in March 2023 and can be extended to March 2024, subject to certain conditions and at its option. The USD200m term loan matures in April 2024 and the new credit facility has an accordion feature that permits it to request further lender commitments up to a total of USD900m.
Further, the interest rate on the credit facility is based on a pricing grid ranging from 135 basis points to 210 basis points plus LIBOR for the USD200m term loan and 140 basis points to 215 basis points plus LIBOR for the USD400m revolving line of credit, depending upon the company's leverage ratio.
The company added that the new USD200m term loan was fully drawn at closing and proceeds were used to retire the previous USD450m credit facility. At closing, there was USD15m outstanding on the new USD400m revolving line of credit and at present, it has 49 hotels that equals 71% of the total portfolio hotel EBITDA, which are deemed to be unencumbered assets supporting the new credit facility.
Finally, the company mentioned that the credit facility was arranged by joint lead arrangers Deutsche Bank Securities Inc, Merrill Lynch Pierce Fenner & Smith Incorporated, Regions Capital Markets and U.S. Bank National Association; the administrative agent is Deutsche Bank AG New York Branch; Bank of America NA, Regions Bank and U.S. Bank National Association serves as syndication agents; the documentation agents are KeyBank National Association, PNC Bank and Royal Bank of Canada; and the participating lenders are Raymond James Bank NA, Branch Banking and Trust Company, Capital One National Association and BMO Harris Bank NA.
A real estate investment trust, Summit Hotel owns premium-branded hotels in the upscale segment of the lodging industry. As of 10 December 2018, its portfolio comprised of 77 hotels in 26 states in the US.
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