Host Hotels & Resorts successfully fined $ 2.5 billion

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BETHESDA, MD, June 29, 2020 (GLOBE NEWSWIRE) – Host Hotels & Resorts, Inc. (NYSE: HST), the nation’s largest real estate investment trust (the “Company”), today announced that it has amended successfully completed the credit agreement governing its fully drawn $ 1.5 billion revolving credit facility and two $ 500 million term loans.

James F. Risoleo, President and CEO, said: “We have obtained favorable waiver terms from our Support Banking Group due to the Company’s superior balance sheet and liquidity position as well as our history of disciplined capital allocation. We greatly appreciate the strong and long-standing partnership demonstrated by our banks and are pleased to have modified our revolving and term credit facilities in a way that preserves our liquidity to withstand prolonged business disruption and improves our flexibility to take advantage of investment opportunities that ultimately create value for our stakeholders.

The key terms of the amended credit agreement include:

  • Waiver of existing financial covenants tested quarterly for the period July 1, 2020 through the second quarter of 2021, with resumption of testing for the third quarter of 2021 (the “restrictive covenant exemption period”). The Company also has the option of terminating the exemption period early;
  • Modification of the quarterly tested leverage commitment and EBITDA calculation to facilitate compliance in the first three quarters after the end of the commitment exemption period;
  • Authorization to finance encumbered or unencumbered acquisitions of up to $ 1.5 billion with existing liquidity as long as the Company maintains total minimum liquidity of $ 500 million;
  • Ability to fund up to $ 500 million in ROI capital expenditures during the Covenant relief period as well as full capital expenditures incurred for emergency repairs, life safety repairs or regular maintenance repairs;
  • Addition of a LIBOR floor of 15 basis points for the life of the revolving credit facility and term loans and an interest rate increase of 40 basis points in the interest rate grid based on credit ratings during the debt relief period for revolving credit facility and term loans;
  • Added certain restrictions and covenants for the length of the covenants exemption period, including restrictions on dividend and distribution payments (subject to REIT requirements), share repurchases and new covenants restrictive limits limiting additional indebtedness, asset sales and investments (in each case subject to various exceptions);
  • Maintain the revolving credit facility and the original maturity date of a January 2024 term loan with options to extend until January 2025. Maintain the final maturity date of the second January term loan 2025.

Notably, the Company preserved the fully unsecured status of its 80 consolidated assets and maintained the flexibility to sell assets on like-for-like exchanges (up to $ 750 million) as well as other sales of ‘assets up to $ 350 million before triggering any mandatory prepayment obligations under the credit facility.

PJT Partners acted as independent financial advisor to the Company in connection with the modification of its credit facility.

June 30e, the Company expects to voluntarily repay approximately $ 750 million of outstanding borrowings under its $ 1.5 billion fully drawn revolving credit facility. The Company will continuously monitor its liquidity needs and assess the need to draw on its revolving capacity.

Updated Investor Presentation

For more information on the terms of the amended credit agreement as well as an update on business performance, including the first preliminary results from May, please refer to the pdf or interactive version of the July 2020 Investor Presentation located in the investor section of the Company’s website.

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. is an S&P 500 company and is the largest accommodation real estate investment trust and one of the largest owners of luxury and upscale hotels. The Company currently owns 75 properties in the United States and five properties internationally totaling approximately 46,700 rooms. The Company also has non-controlling interests in six domestic joint ventures and one international joint venture. Guided by a disciplined approach to capital allocation and aggressive asset management, the Company partners with premium brands such as Marriott®, Ritz-Carlton®, Westin®, Sheraton®, W®, St. Regis®, The Luxury Collection®, Hyatt®, Fairmont®, Hilton®, Swissôtel®, ibis® and Novotel®, as well as independent brands. For more information, please visit the Company’s website at www.hosthotels.com.

* This press release contains registered trademarks which are the exclusive property of their respective owners. None of the owners of these trademarks assumes responsibility for the information contained in this press release.

Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements include forward-looking statements and are identified by the use of terms and expressions such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend” , “Power”, “should”, “plan”, “predict”, “project”, “will”, “continue” and other similar terms and expressions, including references to assumptions and forecasts of future results . Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: the duration and extent of the COVID-19 pandemic and its short- and long-term impact on travel demand, transient and group business, and levels of consumer confidence; actions taken by governments, businesses and individuals in response to the pandemic, including limiting or banning travel; the impact of the pandemic and the measures taken in response to the pandemic on global and regional economies, travel and economic activity, including the duration and magnitude of its impact on unemployment rates, investments by business and consumer discretionary spending; the pace of recovery as the COVID-19 pandemic subsides; general economic uncertainty in the US markets where we own hotels and deteriorating economic conditions or low levels of economic growth in these markets; the effects of the measures we and our hotel managers are taking to reduce operating costs in response to the COVID-19 pandemic; other changes (apart from the COVID-19 pandemic) in national and local economic and business conditions and other factors such as natural disasters and weather conditions that will affect our hotel occupancy rates and demand for hotel products and services; the impact of geopolitical developments outside the United States on accommodation demand; the volatility of global financial and credit markets; operational risks linked to the hotel business; the risks and limitations of our operational flexibility associated with the level of our indebtedness and our ability to meet the covenants of our debt agreements; risks associated with our relationships with property managers and joint venture partners; our ability to maintain our properties in a first class manner, including meeting capital expenditure requirements; the effects of hotel renovations on the occupancy rate of our hotels and our financial results; our ability to compete effectively in areas such as access, location, quality of accommodation and room rate structures; risks associated with our ability to complete acquisitions and divestitures and to develop new properties and the risks that acquisitions and new developments may not meet our expectations; our ability to continue to meet complex rules to ensure that we remain a REIT for federal income tax purposes; risks associated with our ability to execute our dividend policy, including factors such as operating results and economic outlook influencing our board’s decision to pay additional dividends at previously disclosed levels or to use cash available to pay special dividends; and other risks and uncertainties associated with our business described in the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K filed with the SEC . Although the Company believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, it cannot guarantee that the expectations will be met or that any difference will not be material. All information in this press release is as of June 29, 2020 and the Company does not undertake to update any forward-looking statement to conform with the statement to actual results or to changes in the expectations of the Company.

Tejal engman
Vice president
240.744.5116

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