Host Hotels Prices Senior Notes - Analyst Blog
March 15 2012 - 12:12PM
Zacks
Host Hotels & Resorts, Inc. (HST) recently
announced that its sole general partner, Host Hotels & Resorts,
L.P. has priced a private placement offering worth $350 million in
aggregate principal amount of 5 1/4% senior notes maturing 2022.
The offering is expected to close on March 22, 2012.
The company expects to generate net proceeds of approximately
$344 million from the transaction and repay the $113 million
principal amount outstanding of the 7.5% mortgage secured by the JW
Marriott, Washington, D.C. and to redeem $250 million of 6
7/8% Series S senior notes due in 2014.
Host Hotels reported fourth quarter 2011 FFO (funds from
operations) of $233 million or 31 cents per share compared with
$187 million or 26 cents per share in the year-earlier quarter.
Funds from operations, a widely used metric to gauge the
performance of REITs, is obtained after adding depreciation and
amortization and other non-cash expenses to net income.
At the end of the year, Host Hotels had over $826 million in
cash and cash equivalents and about $883 million under its credit
facility. Total debt of the company at the end of fourth quarter
2011 stood at $5.8 billion.
Host Hotels is the largest lodging real estate investment trust
(REIT), and one of the largest owners of luxury and upper-upscale
hotels, primarily operated under premium brand, such as Marriott,
Westin, Sheraton, Ritz-Carlton, Hyatt, W, Four Seasons and St.
Regis.
Host Hotels has a strong balance sheet, which provides the
financial flexibility to pursue high-yielding acquisitions, high
ROI (return on investments) capital projects, dividend payouts and
share buybacks. This augurs well for its long-term growth.
Host Hotels currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating. We are also maintaining our
long-term Neutral recommendation on the stock. One of its
competitors, LaSalle Hotel Properties (LHO)
(LHOalso holds a Zacks #3 Rank.
HOST HOTEL&RSRT (HST): Free Stock Analysis Report
LASALLE HTL PRP (LHO): Free Stock Analysis Report
LASALLE HTL PRP (LHO): Free Stock Analysis Report
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