Apple REIT Ten subsidiary gets $75 million two-year revolver

By Angela McDaniels

Tacoma, Wash., July 31 - Apple REIT Ten, Inc. subsidiary Apple Ten Hospitality, Inc. entered into a $75 million revolving credit facility due July 24, 2015, according to an 8-K filing with the Securities and Exchange Commission.

Wells Fargo Bank, NA is the administrative agent.

The maturity date can be extended to July 2016 subject to the payment of an extension fee of 25 basis points.

The revolver has a $25 million accordion feature.

The initial interest rate is one-month Libor plus 225 bps. The margin over Libor ranges from 225 bps to 275 bps depending on the company's leverage ratio.

The unused facility fee is 25 bps or 35 bps based on the amount of borrowings outstanding during the quarter.

The revolver will be used for acquisitions, hotel renovations, working capital and other general corporate funding purposes, including the payment of redemptions and distributions.

The revolver closed on July 26. On that day, the company borrowed $54.0 million and used $53.6 million of that to help fund the purchase price of eight hotels and $400,000 to pay loan origination costs.

The financial covenants include, among others, a minimum net worth, maximum debt limits, maximum distributions, minimum debt service and fixed charge coverage ratios and restrictions on investments.

Richmond, Va.-based Apple invests in hotels and other income-producing real estate.

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