PHILADELPHIA--(BUSINESS WIRE)--Hersha Hospitality Trust (NYSE:HT, “Hersha” or the “Company”), owner of upscale hotels in urban gateway markets, announced the Company closed on a new $200 million Senior Unsecured Term Loan (the “Term Loan”). The new Term Loan, together with the Company’s existing term loans and revolving line of credit, expands the Company’s senior unsecured borrowing capacity from $800 million to $1.0 billion before taking into account any draws or pay downs.
“We welcome our lending group’s continued support of Hersha’s growth initiatives and strategic direction. The new Term Loan sustains the significant efforts undertaken to optimize our balance sheet and provides additional flexibility to execute our business plan. Furthermore, this new Term Loan addresses our 2016 and 2017 debt maturities, resulting in estimated interest expense savings of approximately $7.0 million on a full-year pro forma basis,” stated Ashish R. Parikh, Chief Financial Officer.
The Term Loan’s interest rate is based on a pricing grid with a range of 145 to 220 basis points over LIBOR, based on the Company’s leverage ratio, and matures in 5 years. At closing, $50.0 million was advanced to the Company as a single draw. The remaining $150.0 million will be available to the Company on a delayed draw basis up to 9 months after the closing date in one or more advances. The Company will utilize the Term Loan to refinance existing indebtedness, as well as for the repayment of transaction expenses, general corporate purposes, potential acquisitions and capital expenditures.
The Term Loan was arranged by Citibank, N.A. and Wells Fargo Bank, National Association, as Joint Lead Arrangers and Joint Book Running Managers. Bank of America, N.A., Manufacturers and Traders Trust Company, U.S. Bank National Association, Compass Bank and BMO Harris Bank, N.A. acted as Co-Documentation Agents. Other participating lenders included PNC Bank, National Association, Fifth Third Bank, an Ohio Banking Corporation, TD Bank, N.A., Land Bank of Taiwan, New York Branch and The Provident Bank.
Hersha Hospitality Trust (HT) is a self-advised real estate investment trust in the hospitality sector, which owns and operates high quality upscale hotels in urban gateway markets. The Company's 56 hotels totaling 8,899 rooms are located in New York, Boston, Philadelphia, Washington, DC, Miami and select markets on the West Coast. The Company's shares are traded on The New York Stock Exchange under the ticker “HT”.
Forward Looking Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those reflected in the forward-looking statement. These forward looking statements may include statements related to, among other things, the Company’s expectations regarding future interest rates, the Company’s ability to manage revenues and expenses and future revenues generated by the Company’s assets. For a description of these factors, please review the information under the heading “Risk Factors” included in Hersha Hospitality Trust’s filings with the U.S. Securities and Exchange Commission Annual Report on Form 10-K for the year ended December 31, 2015.