Summit Hotel amends credit agreements to adjust financial covenants

By Sarah Lizee

Olympia, Wash., May 12 – Summit Hotel Properties, Inc. amended three credit agreements on Thursday to adjust financial covenants, according to an 8-K filing with the Securities and Exchange Commission.

Summit Hotel OP, LP as borrower and Summit Hotel Properties as parent guarantor amended the $600 million senior credit facility with Deutsche Bank AG New York Branch as administrative agent, providing for temporary waivers of all financial and some other covenants in the credit facility for the period April 1 through March 31, 2021.

Some financial covenants were also amended for the April 1, 2021 through Dec. 31, 2021, including increases in the maximum leverage ratio, adjusting down each quarter of 2021, reduction of the minimum consolidated fixed charge coverage ratio, increase of the maximum unsecured leverage ratio and reduction of the minimum unsecured interest coverage ratio.

Also, the amendment provides for increases to the maximum leverage ratio for the calendar year 2022, adjusting down throughout 2022.

The interest rate during the periods of the financial and covenant waivers and adjustments will be set at Libor plus 215 basis points.

Summit Hotel as borrower and Summit Hotel Properties as parent guarantor also amended their $225 million 2018 term loan and $225 million 2017 term loan with KeyBank NA as administrative agent, with the amendments being substantially similar to the amendments made to the $600 million senior credit facility.

Summit Hotel is an Austin, Tex.-based real estate investment trust.

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