Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On March 20, 2017, Host Hotels & Resorts, L.P. (Host L.P.), for whom Host Hotels & Resorts, Inc. acts as sole general
partner, completed its underwritten public offering of $400 million aggregate principal amount of its 3.875% Senior Notes due 2024 (the Series G senior notes).
The offering of the Series G senior notes was made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission on
March 31, 2015, as amended (Registration No. 333-203127) (the Registration Statement), a base prospectus, dated April 23, 2015, included as part of the registration statement, and a prospectus supplement, dated
March 9, 2017, filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended. In connection with the filing of the prospectus supplement, we are filing as Exhibit 5.1 to this Current
Report on Form 8-K an opinion of our counsel, Latham & Watkins LLP, regarding the validity of the securities being registered.
The notes were
issued pursuant to the third supplemental indenture, dated March 20, 2017 (the Supplemental Indenture), between Host L.P. and The Bank of New York Mellon, as trustee (the Trustee), which supplements the indenture, dated
May 15, 2015 (the Base Indenture and, as supplemented to date, the Indenture) between Host L.P. and the Trustee. The notes pay interest semi-annually in arrears.
Optional Redemption Provisions
At any time, upon not
less than 15 nor more than 60 days notice, the Series G senior notes will be redeemable at Host L.P.s option, in whole or in part, at a price equal to 100% of their principal amount, plus a make-whole premium as set forth in the
Indenture, plus accrued and unpaid interest to, but excluding, the applicable redemption date.
Host L.P. may also redeem the Series G senior notes within
the period beginning 60 days prior to the April 1, 2024 maturity date, in whole or in part, upon not less than 15 nor more than 60 days notice, at a redemption price equal to 100% of the principal amount of the Series G senior notes to be
redeemed, plus accrued and unpaid interest to, but excluding, the applicable date of redemption.
Restrictive Covenants
Under the terms of the Indenture, Host L.P.s ability to incur indebtedness is subject to restrictions and the satisfaction of various conditions,
including the achievement of an EBITDA-to-interest coverage ratio of at least 1.5x by Host L.P. This ratio is calculated in accordance with the Indenture and excludes from interest expense items such as call premiums and deferred financing charges
that are included in interest expense on Host L.P.s consolidated statement of operations. In addition, the calculation is based on Host L.P.s pro forma results for the four prior fiscal quarters giving effect to certain transactions,
such as acquisitions, dispositions and financings, as if they occurred at the beginning of the period. Other covenants limiting Host L.P.s ability to incur indebtedness include maintaining total indebtedness of less than 65% of adjusted total
assets (using undepreciated real estate values) and maintaining secured indebtedness of less than 40% of adjusted total assets. In addition, Host L.P. will at all times be required to maintain total unencumbered assets of at least 150% of the
aggregate principal amount of outstanding unsecured indebtedness of Host L.P. and its subsidiaries. So long as Host L.P. maintains the required level of interest coverage and satisfies these and other conditions in the Indenture, it may incur
additional debt under the Indenture.
Use of Proceeds
Host L.P. intends to use the net proceeds from the sale of the Series G senior notes to repay a portion of Host L.P.s borrowings under its credit
facility and for general corporate purposes.
The foregoing description of the Supplemental Indenture does not purport to be complete, and is qualified in
its entirety by reference to the full text of such document, which is filed herewith as Exhibit 4.1 and is incorporated herein by reference.
Forward-Looking Statements
In this Current Report on
Form 8-K, we make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by their use of terms and phrases such as anticipate,
believe, could, expect, may, intend, predict, project, plan, will, estimate and other similar terms and phrases. Forward-looking
statements are based on managements current
expectations and assumptions, are not guarantees of future performance, and involve known and unknown risks, uncertainties and other factors which may cause our actual results to differ
materially from those anticipated at the time the forward-looking statements are made. These risks and uncertainties include our ability to deploy the proceeds of the Series G senior notes as currently planned and other risks and uncertainties
associated with our business described in our Annual Report on Form 10K for the year ended December 31, 2016, and in other filings with the Securities and Exchange Commission. Although we believe the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, we can give no assurance that we will attain these expectations or that any deviations will not be material. Except as otherwise required by the federal securities laws, we disclaim
any obligations or undertaking to publicly release updates to any forward-looking statement contained in this report to conform the statement to actual results or changes in our expectations.