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Sunstone Hotel completes balance sheet enhancing transactions
By Taylor Fox
New York, Dec. 23 – Sunstone Hotel Investors, Inc. completed a series of balance-sheet enhancing transactions including extending the waiver period of the financial covenant tests on its $500 million undrawn revolving credit facility, $185 million of funded term loan facilities and $205 million of outstanding private placement senior notes, according to a news release.
The transactions also address Sunstone’s remaining near-term maturities, provides resolution with the special servicer on the mortgage loan secured by the Hilton Times Square and reduces the company's monthly cash burn, the company said.
Sunstone completed second amendments to the agreements governing its in-place unsecured debt facilities to extend the covenant waiver period from June 30, 2021 to March 31, 2022.
Additionally, the amendments extend the modification of the required quarterly tested financial covenants to ease compliance for four quarters following the end of the covenant waiver period.
Sunstone will be required to maintain certain minimum liquidity thresholds until it is able to satisfy its pre-amendment financial covenants. As part of the second amendments, the company has been granted the ability to apply the net proceeds received from the previously completed sale of the Renaissance Los Angeles Airport to repay the mortgage loan secured by the Renaissance Washington DC.
The repayment of the loan will eliminate approximately $9.7 million of annual debt service and will leave the company with three mortgages remaining.
Upon the early repayment of the loan, the Renaissance Washington DC will be added as a guarantor of the unsecured debt facilities.
All other financial covenants remain substantively the same.
Sunstone does not have any amounts drawn on its $500 million revolving credit facility.
Sunstone is an Irvine, Calif.-based real estate investment trust.
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