DiamondRock Hospitality amends, restates agreement for $1.2 billion

By Mary-Katherine Stinson

Lexington, Ky., Sept. 28 – DiamondRock Hospitality Co. as parent guarantor and DiamondRock Hospitality LP as borrower entered into a sixth amended and restated credit agreement on Sept. 27 with Wells Fargo Bank, NA for $1.2 billion, according to an 8-K filing with the Securities and Exchange Commission.

The amended agreement consists of a $400 million senior revolving credit facility and two term loan facilities totaling $800 million.

The revolving credit facility under the amended agreement matures on Sept. 27, 2026. It may be extended one year.

The aggregate amount of the facilities may be increased up to $1.4 billion upon the satisfaction of certain conditions.

The term loan facilities consist of a term 1 loan of $500 million maturing on Jan. 3, 2028 and a term 2 loan of $300 million maturing Jan. 3, 2025. The term 2 loan’s maturity may be extended for an additional year.

Interest is based on the company’s ratio of net debt to EBITDA. The margin ranges from SOFR plus 140 basis points to 225 bps for the revolver and 135 bps to 220 bps for the term loans.

The margin can be reduced by up to 4 bps if certain sustainability performance targets are met.

There is a fee of 20 bps on the unused portion of the revolver if the average usage is equal to or greater than 50% and 30 bps if the average usage is less than 50%.

Wells Fargo Securities LLC, BofA Securities, Inc, U.S Bank NA and TD Securities (USA) LLC are joint lead arrangers and bookrunners.

KeyBanc Capital Markets, Inc., Regions Capital Markets, PNC Capital Markets LLC and Capital One, NA are the joint lead arrangers.

Bank of America, NA, U.S. Bank NA and TD Bank, NA are syndication agents.

KeyBank NA, Regions Bank, PNC Bank, NA, BMO Harris Bank, NA and Capital One, NA are documentation agents and Wells Fargo Bank, NA and PNC Bank, NA are sustainability structuring agents.

Proceeds from the term loans were used to repay the $350 million term loan in the prior facility, the $50 million term loan facility that was scheduled to mature in October 2023 and the $150 million that was outstanding on a revolving credit facility.

Remaining proceeds will be used to repay the mortgage loan maturities due in 2023 over the next 90 days.

Upon the repayment of the mortgage loans, the company will have no debt maturities until August 2024.

DiamondRock is a Bethesda, Md.-based hospitality-focused real estate investment trust.

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