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Hersha restates credit facility for $500 million revolver, term loan
By Marisa Wong
Madison, Wis., March 6 - Hersha Hospitality Trust amended and restated its existing credit facility and closed a $500 million unsecured revolving and term loan credit facility on Feb. 28, according to an 8-K filing with the Securities and Exchange Commission.
Citibank, NA is the administrative agent, Wells Fargo Bank, NA is the syndication agent, and Citigroup Global Markets Inc. and Wells Fargo Securities, LLC are the joint lead arrangers and joint book running managers.
The facility consists of a $250 million revolver due Feb. 28, 2018 and a $250 million term loan due Feb. 28, 2019. The revolver has a one-year extension option.
The borrower may increase the original principal amount of the credit agreement up to $850 million.
The term loan was funded as a single draw of $150 million at closing, and up to $100 million will be available on a delayed-draw basis through Sept. 30, 2014.
Interest for the revolver is Libor plus a margin of 170 basis points to 245 bps, depending on the company's leverage ratio. Pricing for the term loan is Libor plus 160 bps to 235 bps, also based on the company's leverage ratio.
Availability under the credit agreement is based on the lesser of the borrowing base value for borrowing base properties and the ratio of net operating income from borrowing base properties to annual debt service. Twenty properties are unencumbered borrowing base properties as of the closing of the facility. The company expects to add an additional property shortly after closing.
The credit agreement includes maximum leverage ratio, maximum secured debt leverage ratio, minimum fixed-charge coverage ratio, maximum dividend payout ratio and minimum tangible net worth financial covenants and borrowing base financial covenants.
The hospitality sector real estate investment trust is based in Harrisburg, Pa.
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