DiamondRock HospitalityCo. amended its senior unsecured revolving credit facility, closed anew five-year $100 million senior unsecured term loan and detailed pending hoteldispositions.
In an earnings release, the company said it amended the creditfacility May 3 to boost the capacity to $300 million, reduce pricing and push thematurity date to May 2020. The new facility also includes an accordion feature toexpand it up to $600 million, subject to lender consent.
The interest rate on the new facility is based on a pricing gridranging from 150 basis points to 225 basis points over LIBOR, based on DiamondRock'sleverage ratio. At present, the interest rate is 150 basis points over LIBOR. Thecompany also reduced the unused facility fees and modified certain financial covenants.
The new five-year $100 million senior unsecured term loan wasalso closed May 3, with the company receiving proceeds of $50 million.
The interest rate on the term loan is based on a pricing gridranging from 145 basis points to 220 basis points over LIBOR, based on the company'sleverage ratio.
The company used the proceeds with corporate cash to repay $55million of borrowings outstanding on its senior unsecured credit facility. It expectsto receive the remaining $50 million of proceeds in connection with the repaymentof the mortgage loan secured by the Courtyard Manhattan Fifth Ave. later in May.
The company also said it is under contract to sell two hotelsfor a total price of approximately $200 million.
It expects the transactions to be accretive to its average portfolioRevPAR, improve its long-term RevPAR growth outlook and increase its hotel adjustedEBITDA margin. The transactions are subject to certain conditions, including theassumption of debt on one of the hotels.
DiamondRock added that it is also evaluating the opportunityto offload one or more of its New York City hotels depending on pricing. None ofthese hotels is under contract for sale at present.