Hersha Hospitality Trust arranges new $400 million credit facility

By Toni Weeks

San Diego, Nov. 8 - Hersha Hospitality Trust said it closed on a new $400 million senior unsecured credit facility, replacing its previous $250 million senior secured revolving credit facility.

According to a press release, the new facility consists of a $250 million senior unsecured revolving line of credit and a $150 million senior unsecured term loan. It may be increased to $550 million.

Upon closing, the company drew $100 million from the term loan to pay off the balance on the previous revolver and on mortgage loans at six hotel properties and for general corporate purposes. Interest on the first tranche borrowings will be a fixed rate of 3.195% for four years. The company said it plans to draw another $50 million of the term loan prior to Dec. 31.

"The overwhelming support of the banking community resulted in a significant oversubscription that allows us to eliminate our floor pricing and reduce our weighted average cost of debt, extends the term of the facility and provides us access to the unsecured debt markets," chief financial officer Ashish R. Parikh said in the release.

Citigroup Global Markets Inc. and Wells Fargo Securities, LLC were joint lead arrangers and bookrunners. Bank of America, NA, Raymond James Bank, NA, Manufacturers and Traders Trust Co. and TD Bank, NA are the co-documentation agents.

BBVA Compass, Fifth Third Bank, Regions Bank and US Bank NA are senior managing agents. Additional lenders include Goldman Sachs Bank USA, Morgan Stanley Bank, NA, UBS Loan Finance LLC, PNC Bank, Provident Bank and beneficial Bank.

The Philadelphia-based company is a self-advised real estate investment trust that owns 64 hotels in major urban gateway markets.

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