Strategic Hotels & Resorts Announces New $300 Million Stock Secured Credit
Facility And Termination Of Interest Rate Swap Portfolio
CHICAGO, April 28, 2014
CHICAGO, April 28, 2014 /PRNewswire/ -- Strategic Hotels & Resorts, Inc.
(NYSE: BEE) today announced that it has closed a new $300.0 million stock
secured credit facility with an accordion feature allowing for additional
borrowing capacity up to $400.0 million. The new facility replaces a $300.0
million mortgage secured revolving credit facility set to mature, assuming all
extension options were exercised, in June 2015. The facility's interest rate
is based upon a leverage-based pricing grid ranging from LIBOR plus 175 basis
points to LIBOR plus 250 basis points. Initial pricing will be LIBOR plus 200
basis points, which is a reduction from the previous facility's pricing of
LIBOR plus 275 basis points. The facility has a four-year term with a
one-year extension available to the Company.
The facility is secured by an equity pledge in direct and indirect
subsidiaries that own, lease or operate five of the company's assets: the Four
Seasons Jackson Hole, Four Seasons Silicon Valley, Marriott Lincolnshire,
Ritz-Carlton Half Moon Bay and Ritz-Carlton Laguna Niguel hotels.
Deutsche Bank Securities Inc. and JP Morgan Securities LLC served as Joint
Lead Arrangers and Joint Book Running Managers for the facility. Deutsche
Bank AG New York Branch and JP Morgan Chase Bank, N.A.served as
Administrative Agent and Syndication Agent, respectively. Bank of America,
N.A.; BMO Harris Bank, N.A.; Capital One Bank, N.A.; Sumitomo Mitsui Banking
Corporation; and Wells Fargo Bank, National Association served as
Co-Documentation agents. MidFirst Bank; PNC Bank; Raymond James Bank, N.A.;
and The PrivateBank are additional participating banks.
Additionally, the Company paid $22.7 million to terminate its remaining $400.0
million notional value interest rate swap portfolio with maturity dates
ranging from September 2014 through February 2016, which will save
approximately $11.5 million in 2014 cash interest expense. The swap portfolio
had a weighted average LIBOR strike rate of 5.09 percent.
About the Company
Strategic Hotels & Resorts, Inc. is a real estate investment trust (REIT)
which owns and provides value enhancing asset management of high-end hotels
and resorts in the United States and Europe. The Company currently has
ownership interests in 16 properties with an aggregate of 7,862 rooms and
835,000 square feet of multi-purpose meeting and banqueting space. For a list
of current properties and for further information, please visit the Company's
website at www.strategichotels.com.
This press release contains forward-looking statements about Strategic Hotels
& Resorts, Inc. (the "Company"). Except for historical information, the
matters discussed in this press release are forward-looking statements subject
to certain risks and uncertainties. These forward-looking statements include
statements regarding the Company's future financial results, stabilization in
the lodging space, positive trends in the lodging industry and the Company's
continued focus on improving profitability. Actual results could differ
materially from the Company's projections. Factors that may contribute to
these differences include, but are not limited to the following: the effects
of the recent global economic recession upon business and leisure travel and
the hotel markets in which the Company invests; the Company's liquidity and
refinancing demands; the Company's ability to obtain, refinance or extend
maturing debt; the Company's ability to maintain compliance with covenants
contained in its debt facilities; stagnation or further deterioration in
economic and market conditions, particularly impacting business and leisure
travel spending in the markets where the Company's hotels operate and in which
the Company invests, including luxury and upper upscale product; general
volatility of the capital markets and the market price of the Company's shares
of common stock; availability of capital; the Company's ability to dispose of
properties in a manner consistent with its investment strategy and liquidity
needs; hostilities and security concerns, including future terrorist attacks,
or the apprehension of hostilities, in each case that affect travel within or
to the United States, Mexico, Germany or other countries where the Company
invests; difficulties in identifying properties to acquire and completing
acquisitions; the Company's failure to maintain effective internal control
over financial reporting and disclosure controls and procedures; risks related
to natural disasters; increases in interest rates and operating costs,
including insurance premiums and real property taxes; contagious disease
outbreaks, such as the H1N1 virus outbreak; delays and cost-overruns in
construction and development; marketing challenges associated with entering
new lines of business or pursuing new business strategies; the Company's
failure to maintain its status as a REIT; changes in the competitive
environment in the Company's industry and the markets where the Company
invests; changes in real estate and zoning laws or regulations; legislative or
regulatory changes, including changes to laws governing the taxation of REITs;
changes in generally accepted accounting principles, policies and guidelines;
and litigation, judgments or settlements.
Additional risks are discussed in the Company's filings with the Securities
and Exchange Commission, including those appearing under the heading "Item 1A.
Risk Factors" in the Company's most recent Form 10-K and subsequent Form
10-Qs. Although the Company believes the expectations reflected in such
forward-looking statements are based on reasonable assumptions, it can give no
assurance that its expectations will be attained. The forward-looking
statements are made as of the date of this press release, and the Company
undertakes no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise,
except as required by law.
SOURCE Strategic Hotels & Resorts, Inc.
Contact: Diane Morefield, EVP, Chief Financial Officer, Strategic Hotels &
Resorts, Inc., (312) 658-5740, or Jonathan Stanner, VP, Capital Markets &
Treasurer, Strategic Hotels & Resorts, Inc., (312) 658-5746
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