Ashford Hospitality Trust Increases Funding Flexibility With Amendment to Security Capital Financing
February 10 2005 - 4:00PM
PR Newswire (US)
Ashford Hospitality Trust Increases Funding Flexibility With
Amendment to Security Capital Financing DALLAS, Feb. 10
/PRNewswire-FirstCall/ -- Ashford Hospitality Trust, Inc.
(NYSE:AHT) today announced that it has amended the terms of its
Convertible Preferred Stock Purchase Agreement dated December 27,
2004, with Security Capital Preferred Growth Incorporated. The
Company had previously closed in December 2004 a private placement
of up to $75 million in cumulative convertible preferred stock with
Security Capital to provide potential funding for the Company's
previously announced acquisition of a 21-hotel portfolio for total
consideration of approximately $250 million expected to close in
March 2005. The private placement of Series B cumulative
convertible preferred stock to Security Capital Preferred Growth
was originally a two-stage transaction with a $20 million first
tranche, $10 million of which was funded on December 30, 2004, and
a $55 million second tranche. Under the terms of the purchase
agreement, Security Capital is also entitled to purchase up to 20%
of any equity security offering the Company completes until no
later than July 31, 2005. Pursuant to this participation right and
as a result of the Company's recent common stock offering closed on
January 20, 2005, Security Capital has the right to acquire up to
2,070,000 shares of common stock at the offering price less
underwriting discounts. Ashford and Security Capital have agreed to
modify the terms of the Convertible Preferred Stock Purchase
Agreement in two areas. First, the purchase agreement has been
modified by giving the Company and Security Capital the option,
exercisable up to October 11, 2005 (in the case of Security
Capital) and no later than October 12, 2005 (in the case of the
Company), to sell (or purchase) on November 1, 2005, the common
shares representing the 20% participation in the Company's recent
common stock offering. However, the Company, at its option, may
issue the common stock to Security Capital on an earlier date
provided that the Company has sold the entire $75 million in
convertible preferred stock to Security Capital under the purchase
agreement. Second, in lieu of Security Capital's right to purchase
$14.7 million of Series B preferred stock upon the closing of the
currently pending 21-hotel acquisition and an additional $20
million by June 30, 2005, the modification provides that if the
Company has not given notice to Security Capital of its intent to
sell $34.7 million of the second tranche by June 14, 2005, Security
Capital can cause the Company to issue $34.7 million in preferred
stock on June 30, 2005. Commenting on the announcement, Monty J.
Bennett, President and CEO of Ashford Hospitality Trust, stated,
"We are pleased to complete this modification of our agreement with
Security Capital. In doing so, we have more closely aligned the
timing of this funding with our expected capital needs while at the
same time minimizing our borrowing costs. This arrangement has
provided a very flexible source of capital, and we look forward to
continuing our relationship with Security Capital as we move
forward with the closing of our previously announced 21-hotel
portfolio acquisition." Ashford Hospitality Trust is a
self-administered real estate investment trust focused on investing
in the hospitality industry across all segments and at all levels
of the capital structure, including direct hotel investments, first
mortgages, mezzanine loans and sale-leaseback transactions.
Additional information can be found on the Company's web site at
http://www.ahtreit.com/ . Certain statements and assumptions in
this press release contain or are based upon "forward-looking"
information and are being made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to risks and
uncertainties. When we use the words "will likely result," "may,"
"anticipate," "estimate," "should," "expect," "believe," "intend,"
or similar expressions, we intend to identify forward-looking
statements. Such forward-looking statements include, but are not
limited to, the expectation that the 21-hotel portfolio transaction
will close, the impact of the transaction on our business and
future financial condition, our business and investment strategy,
our understanding of our competition and current market trends and
opportunities and projected capital expenditures. Such statements
are subject to numerous assumptions and uncertainties, many of
which are outside Ashford's control. These forward-looking
statements are subject to known and unknown risks and
uncertainties, which could cause actual results to differ
materially from those anticipated, including, without limitation:
general volatility of the capital markets and the market price of
our common stock; changes in our business or investment strategy;
availability, terms and deployment of capital; availability of
qualified personnel; changes in our industry and the market in
which we operate, interest rates or the general economy; and the
degree and nature of our competition. These and other risk factors
are more fully discussed in Ashford's filings with the Securities
and Exchange Commission. The forward-looking statements included in
this press release are only made as of the date of this press
release. Investors should not place undue reliance on these
forward-looking statements. We are not obligated to publicly update
or revise any forward-looking statements, whether as a result of
new information, future events or circumstances, changes in
expectations or otherwise. Contact: Douglas Kessler COO and Head of
Acquisitions (972) 490-9600 or Tripp Sullivan Corporate
Communications, Inc. (615) 254-3376 DATASOURCE: Ashford Hospitality
Trust, Inc. CONTACT: Douglas Kessler, COO and Head of Acquisitions
of Ashford Hospitality Trust, Inc., +1-972-490-9600; or Tripp
Sullivan of Corporate Communications, Inc., +1-615-254-3376, for
Ashford Hospitality Trust, Inc. Web site: http://www.ahtreit.com/
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