Ashford Hospitality Refinances to Extend Loan Maturities and Sells Note to Improve Liquidity
November 19 2009 - 4:00PM
PR Newswire (US)
DALLAS, Nov. 19 /PRNewswire-FirstCall/ -- Ashford Hospitality
Trust, Inc. (NYSE:AHT) today announced the refinancing of its
remaining 2010 debt maturity and significant progress on the
Company's 2011 maturities through transactions with Prudential
Mortgage Capital Company and Wheelock Street Capital. The $145.0
million non-recourse financing includes an A-Note from Prudential
and a B-Note from Wheelock Street with a combined interest rate of
12.26% and a term of six years. The loans are secured by the
Embassy Suites Crystal City, Embassy Suites Orlando Airport,
Embassy Suites Santa Clara, Embassy Suites Portland and the Hilton
Costa Mesa. The proceeds pay off a $75.0 million loan maturing in
2010 and a $65.2 million loan maturing in 2011 that are secured by
the five properties, and provide $4.0 million for capital
improvements to be drawn over a 24-month period. The Hilton Auburn
Hills and the Hilton Rye Town, which were included in the maturing
loans, are now unencumbered. Hodges Ward Elliott represented the
Company in the transaction. During 2009, the Company has completed
$265.3 million of loan financings and/or extensions. The combined
net proceeds from the year to date financings exceeded the existing
loan balances and closing costs. Ashford's blended weighted average
interest rate following the refinancing is 3.62%, assuming the
offset to interest expense from the benefit of the interest rate
swap. In terms of non-extendable loans coming due, the Company has
no further 2009 maturities (except for the previously announced
Hyatt Regency Dearborn loan maturity acceleration via foreclosure
proceeding), no remaining 2010 maturities, and $229.0 million in
2011. The Company's unrestricted cash balance as of the end of the
third quarter was $197.9 million. The Company also completed the
sale of the Westin Westminster mezzanine loan that was defeased by
the original borrower in 2007 as part of a refinancing. The total
gross proceeds received by the Company amounted to $13.6 million
before transaction costs. The loan had an outstanding balance of
$11.0 million with a September 1, 2011 maturity. The Company
negotiated for the release of the portfolio of government agency
securities serving as the defeased loan collateral, and sold the
actual securities via an auction. The Company obtained pricing in
excess of the par amount due to the high pay coupon compared to
current market rates. Commenting on the announcements, Monty
Bennett, Chief Executive Officer, said, "We are pleased to be able
to close this financing during this challenging period in the
credit markets. Prudential and Wheelock Street demonstrated
professionalism throughout this process. Our proactive capital
allocation strategy continues to enhance our balance sheet and
liquidity, thereby allowing us to focus on transactions that have
the greatest value impact for our shareholders." Merrick Kleeman, a
Managing Partner of Wheelock Street Capital, added, "Outstanding
work by talented professionals at Ashford, Prudential and Wheelock
made this transaction possible. This portfolio is geographically
diversified and well-maintained, and has performed extraordinarily
well during the recent downturn. The Ashford refinancing is an
excellent first investment opportunity for our firm and we look
forward to working constructively with many other owners to provide
capital solutions as they refinance or recapitalize assets."
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, second mortgages, mezzanine
loans and sale-leaseback transactions. Additional information can
be found on the Company's web site at http://www.ahtreit.com/.
Wheelock Street Capital, L.L.C. is a real estate private equity
firm founded in 2008 by Merrick R. Kleeman and Jonathan H. Paul.
Wheelock Street pursues a highly focused, fundamentally-driven
investment strategy. Backed by established institutional capital,
the Company is currently pursuing acquisitions and
recapitalizations of real estate and operating platforms in the
hospitality, multifamily, condominium and residential
land/homebuilding sectors. Additional information may be obtained
by contacting (203) 413-7700. 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 timing for closing, 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. EBITDA is defined as net income before
interest, taxes, depreciation and amortization. EBITDA yield is
defined as trailing twelve month EBITDA divided by the purchase
price. A capitalization rate is determined by dividing the
property's annual net operating income by the purchase price. Net
operating income is the property's funds from operations minus a
capital expense reserve of either 4% or 5% of gross revenues. Funds
from operations ("FFO"), as defined by the White Paper on FFO
approved by the Board of Governors of the National Association of
Real Estate Investment Trusts ("NAREIT") in April 2002, represents
net income (loss) computed in accordance with generally accepted
accounting principles ("GAAP"), excluding gains (or losses) from
sales or properties and extraordinary items as defined by GAAP,
plus depreciation and amortization of real estate assets, and net
of adjustments for the portion of these items related to
unconsolidated entities and joint ventures. 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. DATASOURCE:
Ashford Hospitality Trust, Inc. CONTACT: David Kimichik, Chief
Financial Officer, +1-972-490-9600; Tripp Sullivan, Corporate
Communications, Inc., +1-615-324-7318 Web Site:
http://www.ahtreit.com/
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