Host Hotels amends facility to add $500 million five-year term loan

By Susanna Moon

Chicago, July 26 - Host Hotels & Resorts, Inc. said it closed an expanded $500 million five-year term loan with interest at Libor plus 180 basis points, based on leverage, or an about 2% all-in interest rate. The company had planned to get a $400 million term loan.

Proceeds will be used to repay part of the revolver draw for the company's recent acquisition of the 888-room Grand Hyatt Washington, D.C., as well as to redeem $400 million of senior notes.

The term loan was arranged by Wells Fargo Securities, LLC, Bank of America Merrill Lynch and J.P. Morgan Securities, LLC as the lead arrangers and bookrunners.

Host Hotels & Resorts, LP amended its agreement for a $1 billion revolving loan facility Wednesday with Bank of America, NA as administrative agent to add the term loan, according to an 8-K filing with the Securities and Exchange Commission by Host Hotels & Resorts, Inc. and Host Hotels & Resorts, LP, for whom Host Inc. is the general partner.

The company added the term loan by exercising an option under the facility to boost the total size for up to $500 million of additional commitments.

The term loan will mature in July 2017. The revolving loan commitments are still set to mature in November 2015 with an option to extend the maturity by one year.

Interest on the term loan will range from Libor plus 165 bps to 265 bps, based on leverage. The rate will fall to 115 bps to 200 bps if the company achieves investment-grade ratings and opts to base pricing on those ratings.

"Since the beginning of the year and after taking into consideration our expected use of proceeds, we have increased our weighted average debt maturity by approximately six months and decreased our weighted average interest rate by over 55 [bps]," Larry K. Harvey, executive vice president and chief financial officer, said in the release.

The company noted on July 17 that it had received commitments from banks and expected to raise a new $400 million five-year term loan priced at Libor plus 180 bps.

Host Hotels is a Bethesda, Md.-based real estate investment trust that owns luxury and upper-upscale hotels.

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