Ashford Hospitality Trust Inc. reports that it has restructured a $203.4 million mortgage loan and extended the maturity date from December 2011 to March 2014. The development also includes a one-year extension option subject to the satisfaction of certain conditions.
According to Ashford, the restructuring provides for a new interest rate of LIBOR plus 4.50%, with no LIBOR floor. At the closing of the restructuring, the company paid down the loan by $25 million to $178.4 million. Additionally, terms include that 85% of excess cashflow after debt service, working capital, and approved capital expenditures will be used to pay down the debt balance and thereby further de-leverage the portfolio.
Ashford further reports that it has engaged in negotiations with a special servicer to restructure and extend a $167 million non-recourse portfolio mortgage loan that matures in May 2012. On a parallel path, the company is also in discussion with third-party lenders to refinance this loan. Ashford says there is a high likelihood of a viable restructure or refinance under current market conditions given the level of existing cash held in reserve for a possible debt pay down for this loan.
‘We are very pleased to announce this restructuring and extension with a market pay down which preserves our cash for more accretive opportunities,’ says CEO Monty J. Bennett. ‘Given our success with this loan restructuring and continued improvement in our portfolio performance through RevPAR growth and gains in operating margin, we remain confident in our ability to address future debt maturities."