AHT Ashford Hospitality Trust Inc

Ashford Hospitality Trust Inc. (AHT), the second largest lodging real estate investment trust (REIT) in the U.S., has recently priced its public offering of 7.0 million common shares at $12.50 each. The equity offer is part of the corporate strategy of the company to raise capital to repay debt. The company will also grant the underwriters an option to purchase an additional 1.05 million shares to cover any over-allotments.

Morgan Stanley (MS) – a global financial services firm; KeyBanc Capital Markets – the investment banking division of KeyCorp (KEY); UBS Securities LLC, a subsidiary of UBS AG (UBS); and Credit Suisse Securities (USA) LLC – the investment banking division of Credit Suisse Group (CS) are acting as joint book-running managers for the secondary offering.

Ashford intends to utilize the proceeds from the secondary offering primarily to repay debt under its senior credit facility. The remainder of the proceeds would be used for other corporate purposes such as acquisition and other hotel-related investments. By the end of first quarter 2011, the company had a staggering debt burden of approximately $1.1 billion, primarily due to its acquisition binge.

Ashford has continually focused on acquiring upper-upscale and luxury hotels in diversified markets throughout the U.S. The company seeks to own assets in some of the premium markets of the country at discounted prices as property prices has nose-dived in the last couple of years.

Ashford also has a well-experienced management team that puts on board a unique perspective to hotel investment sourcing, underwriting, asset managing, selling, and financing. The company’s proactive asset management strategy further provides the flexibility to adapt to the changing market conditions to maximize operating margins and enhance the customer experience.

We currently have a ‘Neutral’ rating on Ashford, which presently has a Zacks #3 Rank translating into a short-term ‘Hold’ recommendation.

 
ASHFORD HOSPTLY (AHT): Free Stock Analysis Report
 
CREDIT SUISSE (CS): Free Stock Analysis Report
 
KEYCORP NEW (KEY): Free Stock Analysis Report
 
MORGAN STANLEY (MS): Free Stock Analysis Report
 
UBS AG (UBS): Free Stock Analysis Report
 
Zacks Investment Research