Massachusetts based real estate investment trust (REIT)
Hospitality Properties Trust
) recast its credit facility for $1.15 billion. Notably, this
comprises its existing unsecured revolving credit facility and
unsecured term loan of $750 million and $400 million,
With a consortium of 24 banks, Hospitality Properties amended its
existing credit facilities. The revolving credit facility of $750
million is now set to mature on Jul 15, 2018, extending from the
previous date of Sep 7, 2015. Interest paid on drawings decreased
20 basis points (bps) to LIBOR plus 110 bps.
Further, facility fee charged on the total limit decreased 10
bps to 30 bps. Moreover, as one of the features, the revolving
credit facility may be extended by another year at the company's
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Hospitality Properties' unsecured term loan of $400 million has
been modified with the extension of its maturity date to Apr 15,
2019 from the previous date of Mar 13, 2017. Further, interest
paid on drawings decreased 25 bps to LIBOR plus 120 basis points.
Notably, any change in Hospitality Properties' credit ratings
will influence the premium over LIBOR and the facility fee.
Further, under certain conditions, the company's total borrowing
capacity can be increased to a maximum of $2.3 billion.
Joint Lead Arrangers for the new facility include Wells Fargo
Securities, LLC, an arm of
Wells Fargo & Company
), Merrill Lynch, Pierce, Fenner & Smith Inc., and PNC
Capital Markets, LLC, a subsidiary of
The PNC Financial Services Group, Inc.
The recast of the credit facility is encouraging for Hospitality
Properties, as it paves the way for lower interest expenses and
financial flexibility to pursue its growth initiatives.
Hospitality Properties currently carries a Zacks Rank #4 (Sell).
Among other REITs,
Getty Realty Corp.
) with a Zacks Rank #2 (Buy) is worth considering.