Sunstone Hotel borrows $300 million under revolving credit facility

By Rebecca Melvin

New York, April 1 – Sunstone Hotel Investors Inc. has borrowed $300 million under the revolving portion of its credit agreement as a precautionary measure to increase cash on hand and preserve financial flexibility in light of a challenging business environment related to the Covid-19 pandemic, according to an 8-K filing with the Securities and Exchange Commission.

The company has $200 million of capacity remaining available for borrowing under the unsecured revolver.

The current interest rate on the borrowings is Libor plus 140 basis points.

Sunstone entered into its amended and restated credit agreement on Oct. 17, 2018, including the company, Sunstone Hotel Partnership LLC, Wells Fargo Bank, NA, Bank of America, NA, JPMorgan Chase Bank, NA, PNC Bank, NA, U.S. Bank NA and other lenders. The amended credit agreement provides for a $500 million unsecured revolver and $185 million of term loan facilities, for a total of $685 million.

The revolving portion of the amended credit agreement matures on April 14, 2023 but may be extended twice by six months each to April 2024. The company also has the right to increase the revolving portion of the amended credit agreement, or to add term loans, in an amount up to $115 million, for an aggregate facility of $800 million, subject in each case to finding lenders that are willing to provide the increase or term loan.

Sunstone is an Irvine, Calif.-based real estate investment trust.

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