Hersha refinances $300 million term loan, enters fixed rate swaps

By Sarah Lizee

Olympia, Wash., Sept. 10 – Hersha Hospitality Trust closed on the refinancing of its $300 million senior term loan, according to a press release.

The company also entered into a series of new swap contracts to fix the interest rates on the remaining $400.9 million of senior term loans.

The $300 million term loan’s interest rate was swapped to a fixed rate of 3.31% from Libor plus 185 basis points. It matures in five years.

Hersha entered into fixed rate swaps on several of the term loans maturing in the 2021 and 2022 and effectively fixed the interest rate of those term loans at 3.53% and 4.02%, respectively.

Following the refinancings, 90% of the company’s outstanding debt is either fixed or hedged through various derivative instruments.

The company has a weighted average interest rate of 3.9% across all borrowings with a weighted average life-to-maturity of about four years.

The term loan refinancing was arranged by Citibank, NA and Wells Fargo Securities, LLC as joint lead arrangers and joint book running managers, with Citibank as administrative agent and Wells Fargo Bank, NA as syndication agent.

First Commercial Bank, Ltd. and Huntington National Bank acted as senior managing agents.

Bank of America, NA, BMO Harris Bank NA, BBVA USA, Fifth Third Bank, Goldman Sachs Bank USA, Manufacturers and Trading Trust Co., Raymond James Bank, NA and TD Bank, NA acted as co-documentation agents. Other participating lenders included Wilmington Savings Fund Society, FSB and Provident Bank.

Philadelphia-based Hersha is real estate investment trust in the hospitality sector.

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