DiamondRock Amends Credit Facility - Analyst Blog
November 27 2012 - 7:15AM
Zacks
DiamondRock Hospitality
Co.(DRH), a real estate investment trust (REIT), recently
amended its $200 million senior unsecured credit facility which
will enable the company to reduce borrowing cost and extend its
debt maturity.
Scheduled to mature in January
2018, the amended facility has an accordion feature that will
enable DiamondRock Hospitality to further increase its borrowing
capacity to $400 million. The new facility bears interest ranging
from 175 to 275 basis points over LIBOR.
As of September 7, 2012, the
company had $21.6 million of unrestricted cash on hand and
approximately $1.0 billion of total debt. Subsequent to the end of
third quarter 2012, the company used the proceeds from the sale of
the Westin Atlanta North to repay $35 million on the credit
facility. Presently the company has $105 million in outstanding
borrowings under the facility.
DiamondRock Hospitality is an owner
of premium hotel properties. The company acquires and invests in
upscale hotels under the Hilton, Marriot and Westin brands across
the US. The company reported adjusted FFO (funds from operations)
of 18 cents per share in the third quarter 2012, missing the Zacks
Consensus estimate by a penny. Currently, the company owns 27
premium hotels with approximately 11,600 rooms along with a senior
mortgage loan on a premium hotel.
DiamondRock Hospitality currently
retains a Zacks #4 Rank, which translates into a short-term Sell
rating. We have a long-term Underperform recommendation on the
stock. One of its competitors, Ashford Hospitality Trust
Inc (AHT) holds a Zacks #3 Rank, which translates into a
short term Hold rating.
Note: Fundfrom 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.
ASHFORD HOSPTLY (AHT): Free Stock Analysis Report
DIAMONDROCK HOS (DRH): Free Stock Analysis Report
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