Published on 1/10/2017 in the Prospect News Investment Grade Daily.
New Issue: Hospitality Properties Trust sells $600 million notes in add-on, new 10-year issue
By Cristal Cody
Eureka Springs, Ark., Jan. 10 – Hospitality Properties Trust priced $600 million of fixed-rate senior notes (Baa2/BBB-) in two tranches on Tuesday, according to a market source and an FWP filing with the Securities and Exchange Commission.
The company sold $200 million in a reopening of its 4.5% notes due June 15, 2023 at 101.215 to yield 4.281%. The notes priced in line with guidance at a spread of 240 basis points over Treasuries.
Hospitality Properties Trust originally sold $300 million of the notes on May 30, 2013 at 99.887 to yield 4.514%, or 240 bps over Treasuries. The total outstanding now is $500 million.
The company’s $400 million offering of 4.95% notes due Feb. 15, 2027 priced at 98.954 to yield 5.083%. The 10-year notes priced with a spread of 270 bps over Treasuries, on the tight side of guidance.
Citigroup Global Markets Inc., RBC Capital Markets Corp, UBS Securities LLC, Wells Fargo Securities LLC, BBVA Securities Inc., Mizuho Securities USA Inc., PNC Capital Markets LLC, Regions Securities LLC and U.S. Bancorp Investments, Inc. were the bookrunners.
Proceeds will be used to repay debt under the trust’s unsecured revolving credit facility, for general business purposes and possibly to redeem some or all of the trust’s outstanding $290 million of series D preferred shares.
The real estate investment trust is based in Newton, Mass.
| Issuer: | Hospitality Properties Trust
|
| Amount: | $600 million
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| Description: | Senior notes
|
| Bookrunners: | Citigroup Global Markets Inc., RBC Capital Markets Corp, UBS Securities LLC, Wells Fargo Securities LLC, BBVA Securities Inc., Mizuho Securities USA Inc., PNC Capital Markets LLC, Regions Securities LLC, U.S. Bancorp Investments, Inc.
|
| Lead managers: | BofA Merrill Lynch, Morgan Stanley & Co. LLC, BB&T Capital Markets
|
| Co-managers: | SMBC Nikko Securities America, Inc., Fifth Third Securities, Inc., FTN Financial Securities Corp.
|
| Trade date: | Jan. 10
|
| Settlement date: | Jan. 13
|
| Ratings: | Moody’s: Baa2
|
| S&P: BBB-
|
| Distribution: | SEC registered
|
|
|
| Six-year notes
|
| Amount: | $200 million reopening
|
| Maturity: | June 15, 2023
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| Coupon: | 4.5%
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| Price: | 101.215
|
| Yield: | 4.281%
|
| Spread: | Treasuries plus 240 bps
|
| Price guidance: | Treasuries plus 240 bps area
|
| Call feature: | Make-whole call at any time at Treasuries plus 35 bps; if redeemed on or after Dec. 15, 2022 zero make-whole amount
|
| Total outstanding: | $500 million, including $300 million priced on May 30, 2013 at 99.887 to yield 4.514%, or 240 bps over Treasuries
|
|
|
| 10-year notes
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| Amount: | $400 million
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| Maturity: | Feb. 15, 2027
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| Coupon: | 4.95%
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| Price: | 98.954
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| Yield: | 5.083%
|
| Spread: | Treasuries plus 270 bps
|
| Price guidance: | Treasuries plus 275 bps area, plus or minus 5 bps
|
| Call feature: | Make-whole call at any time at Treasuries plus 45 bps; if redeemed on or after Aug. 15, 2026 zero make-whole amount
|
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