Host Hotels & Resorts replaces facilities with $2.5 billion facilities

By Angela McDaniels

Tacoma, Wash., Aug. 6 – Host Hotels & Resorts, Inc. limited partnership Host Hotels & Resorts, LP entered into an amended and restated credit agreement on Aug. 1 that provides for a $1.5 billion revolving credit facility due Jan. 11, 2024, a $500 million term loan A-1 due Jan. 11, 2024 and a $500 million term loan A-2 due Jan. 9, 2025, according to an 8-K filing with the Securities and Exchange Commission.

The new facilities replace the company’s $1 billion revolver due May 2021, $500 million term loan due May 2021 and $500 million term loan due September 2020.

The new revolver may be extended by up to a year by the exercise of up to two six-month extension options. The term loan A-1 may be extended up to a year by the exercise of a one-year extension option. The term loan A-2 may not be extended.

The interest rate is Libor plus 100 bps for the new term loans and Libor plus 90 bps for the revolver.

The margin over Libor ranges from 77.5 bps to 145 bps for the revolver and 85 bps to 165 bps for the new term loans. Each depends on Host LP’s unsecured long-term debt rating.

The facility fee on the revolver is 20 bps. It ranges from 12.5 bps to 30 bps.

The credit agreement provides for a foreign-currency subfacility for Canadian dollars, Australian dollars, euros, British pounds sterling and, if available to the lenders, Mexican pesos of up to the foreign-currency equivalent of $500 million, subject to a lower amount in the case of Mexican peso borrowings.

The credit agreement has a $500 million accordion option that may be exercised for additional revolver borrowings and/or term loans.

There is a subfacility of up to $100 million for swingline borrowings in currencies other than dollars and a subfacility of up to $100 million for issuances of letters of credit.

There are no required scheduled amortization payments prior to the maturity date.

The financial covenants are unchanged. The company’s fixed charge coverage ratio may not be less than 1.25 to 1.00, its leverage ratio may not exceed 7.25 to 1.00, and its unsecured interest coverage ratio may not be less than (x) 1.75 to 1.00 if its leverage ratio is less than 7.00 to 1.00 or (y) 1.50 to 1.00 if its leverage ratio is equal to or greater than 7.00 to 1.00.

Borrowings under the credit agreement may be used for working capital, repayment of debt and other general corporate purposes, including for the consummation of acquisitions.

As of Aug. 1, Host LP had about C$74.2 million outstanding under the revolver and had borrowed the two new term loans in full.

Bank of America, NA is the administrative agent.

Host Hotels & Resorts acts as the borrower’s general partner. It is a Bethesda, Md.-based real estate investment trust that owns luxury and upper-upscale hotels.

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