Pebblebrook Hotel Trust has announced the successful extension of a significant portion of its October 2024 maturity term loan.
The $357m extension pushes the maturity date of the loan to January 2028. This strategic move allows the company to manage its debt structure effectively.
Pebblebrook Hotel Trust is the largest owner of urban and resort lifestyle hotels in the United States and owns 46 hotels across 13 urban and resort markets, totalling 12,000 guest rooms.
Debt repayment and financial resilience
As part of the refinancing process, Pebblebrook Hotel Trust paid down about $157.6m of existing term loans and unsecured private placement notes.
The funds were sourced from the company's balance sheet, bolstered by more than $330m from property sales in 2023.
The company now has no substantial debt maturities until October 2025. This proactive approach aligns with Pebblebrook's stated strategic capital allocation objectives.
Transparent financing terms
Despite the extension and debt restructuring, the pricing on all of Pebblebrook's term loans remains unchanged.
The rates are determined by a pricing grid of between 140 and 245 basis points over the applicable adjusted term secured overnight financing rate). This transparent approach ensures consistency in the company's financial dealings.
Pebblebrook Hotel Trust managed to decrease its October 2024 maturity term loan to $400m from $460m while extending the maturity of $357m to January 2028.
The October 2025 maturity term loan was also reduced, falling to $410m from $460m. The company paid down $47.6m of its maturing private notes, leaving $43m of debt maturing in late 2024.
Strengthening the balance sheet
Following these debt-related activities, Pebblebrook holds $2.2 billion in outstanding debt and convertible notes at a weighted average interest rate of 4.6%. 75% of the total outstanding debt and convertible notes effectively bear interest at fixed rates, considering swap agreements.
Bank of America Securities Inc took a leading role in the term loan extension, serving as joint lead arranger and sole bookrunner.
Institutions including the US Bank National Association, Capital One, the National Association, Truist Securities Inc and Wells Fargo Bank played vital roles during the refinancing process.
