Summit Hotel amends management fee, other provisions in facility

By Jennifer Chiou

New York, March 3 – Summit Hotel Properties, Inc. subsidiary Summit Hotel OP, LP entered into an amendment to its $300 million senior credit facility with Deutsche Bank AG, New York Branch as administrative agent, cutting the deemed management fee to 3% from 3.5%, according to an 8-K filing with the Securities and Exchange Commission.

The amended credit agreement is dated as of Feb. 27.

The amendment also changed, among other things, the definition of negative pledge so that the following agreements are not deemed to constitute a negative pledge:

• An agreement that conditions a person’s ability to encumber its assets upon the maintenance of one or more specified ratios that limit the ability to encumber its assets but that do not generally prohibit the encumbrance of its assets; and

• A provision in any agreement governing unsecured debt generally prohibiting the encumbrance of assets so long as such provision is generally consistent with a comparable provision of the loan documents.

In addition, the definition of permitted recourse debt has been changed to delete the following: “exclusive of indebtedness of any subsidiary of the parent guarantor that directly or indirectly holds the fee or leasehold interest in any unencumbered asset.”

In its place, the company added the following: “provided that the aggregate principal amount of any such unsecured indebtedness that has a scheduled maturity date or commitment termination date prior to the one year anniversary of the latest termination date under the credit agreement (taking into account any extensions thereof) shall in no event exceed $125 million.”

Bank of America, NA, Royal Bank of Canada, KeyBank NA, Regions Bank, Raymond James Bank, N.C., and US Bank NA are among the lenders.

Summit Hotel Properties is an Austin, Texas-based hotel investment company.

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