Chesapeake Lodging Trust (
a real estate investment trust (REIT), has recently announced
its decision to offer $5.5 million shares to enhance its liquidity.
The company has also decided to grant the underwriters a 30-day
option to purchase up to an additional 0.8 million shares.
Chesapeake intends to use the net proceeds from the offering to
fund developments as well as future acquisitions of hotels, to
repay debt under its revolving credit facility, and for general
working capital purposes.
J.P. Morgan Securities LLC, part of
J.P Morgan Chase & Co. (
; Wells Fargo Securities LLC, part of
Wells Fargo & Company (
and Deutsche Bank Securities Inc, part of
Deutsche Bank AG (
are the joint book running managers for the offering.
Subsequent to the end of second quarter 2012, Chesapeake closed
on $130 million of secured financings to reduce its interest
burden. Also the company completed $125 million worth of preferred
share offering. With the additional capital raised from this
preferred share offering, the company expects the total investment
in hotel real estate to reach approximately $1.25 billion.
Chesapeake owns luxury and upper-upscale hotels in some of the
most desirable locations in the United States. The company is
specifically focused on ownership and acquisition of hotels at
prices below replacement cost, with attractive return on
investments and significant upside potential. Currently the company
owns 14 hotels with an aggregate of 4,465 rooms in 6 states and the
District of Columbia.
Chesapeake currently retains a Zacks #3 Rank, which translates into
a short-term Hold rating. We also have a long-term Neutral
recommendation on the stock. One of its competitors,
Host Hotels & Resorts Inc (
also holds a Zacks #2 Rank, which translates into a short term Buy
CHESAPEAKE LODG (CHSP): Free Stock Analysis
DEUTSCHE BK AG (DB): Free Stock Analysis Report
HOST HOTEL&RSRT (HST): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
WELLS FARGO-NEW (WFC): Free Stock Analysis
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