Summit Hotel Properties, a hotel investment company, has announced the successful completion of the refinancing of its $600m senior unsecured credit facility. The credit facility consists of a $400m senior unsecured revolving credit facility and a $200m senior unsecured term loan.
The move will strengthen the company's balance sheet, extend maturity dates, maintain pricing and provide flexibility for strategic initiatives.
Increased maturity and favourable pricing
The amended and restated credit agreement extends the maturity date for both the revolver and term loan to June 2028, including extension options.
The pricing grid from the previous credit facility remains intact, ranging from 140 to 240 basis points for the revolver and 135 to 235 basis points for the term loan, over the applicable, adjusted, term-secured overnight financing rate (SOFR).
The agreement's other terms are similar to the company's previous credit facility agreement.
Enhanced financial position
With the successful refinancing, Summit Hotel Properties has increased its average length to maturity to more than three years, including extension options. The company's pro rata outstanding debt maturing in any single year will not exceed 25% of its total outstanding debt.
The company maintains an approximately 80% pro rata fixed interest rate debt and preferred equity capital, after accounting for interest rate derivative agreements. It currently has $450 million of pro rata total liquidity.
Strong partnership and collaboration
To achieve the refinancing, Summit Hotel Properties worked closely with a number of leading financial institutions. BofA Securities, Inc, Wells Fargo Securities, LLC, JPMorgan Chase Bank NA, Regions Capital Markets and the US Bank National Association served as joint book-runners and joint lead arrangers.
Capital One, National Association, The Bank of Nova Scotia and Truist Securities, Inc also participated as joint lead arrangers. The Royal Bank of Canada and Raymond James Bank joined as participants in the credit facility.
The Bank of America NA serves as the administrative agent, while Wells Fargo Bank NA, Regions Bank, JPMorgan Chase Bank NA and the US Bank National Association serve as co-syndication agents.
This successful refinancing represents Summit Hotel Properties' commitment to strengthening its financial position and securing long-term stability for its operations and strategic initiatives.
