ASHFORD HOSPITALITY TRUST COMPLETES REFINANCING OF MORTGAGE LOAN FOR THE RENAISSANCE NASHVILLE

Rhea-AI Summary

Ashford Hospitality Trust, Inc. (NYSE: AHT) has completed the refinancing of the mortgage loan for the Renaissance Hotel in Nashville, Tennessee. The new $267.2 million loan has a two-year initial term with three one-year extension options. The loan is interest only with a floating interest rate of SOFR + 3.98%. Part of the refinancing includes listing the Westin Hotel in Princeton for sale to use the excess proceeds for general corporate purposes.

Positive

• Successful completion of the refinancing of the mortgage loan for the Renaissance Hotel in Nashville, Tennessee.

• New $267.2 million loan obtained with favorable terms.

• Excess proceeds from the refinancing will be used for general corporate purposes and to pay down strategic financing.

• Company making progress in paying off strategic financing and has assets in the market for sale.

Negative

• Listing the Westin Hotel in Princeton for sale might impact the company's asset portfolio.

Insights

Financial Analyst

The refinancing deal by Ashford Hospitality Trust not only alters their debt structure but also impacts their liquidity and financial flexibility. With the new loan being interest-only and having a floating interest rate pegged to SOFR + 3.98%, it indicates a shift towards a potentially variable cost of debt in the future, which would vary with market conditions. This could mean more favorable terms during periods of low interest rates but poses a risk if rates rise. The fact that the new loan exceeds the previous by over $27 million suggests that Ashford will have additional capital for corporate use, which may include paying down other debts. The company's strategy to unencumber the Westin Princeton and its subsequent sale could be seen as a move to streamline assets and focus on core properties, or as a necessity to raise funds. Investors should monitor the use of excess proceeds and the outcomes of asset sales for indications of the company's financial health and strategic direction. The unwinding of the strategic financing is a sign that management is actively working on improving the balance sheet, but the success of this approach will depend on the execution and the real estate and financing markets' conditions.

Real Estate Market Analyst

From a real estate perspective, Ashford Hospitality Trust's refinancing and property sales are a tactical maneuver in a sector that has been recovering post-pandemic. The decision to refinance and list an asset for sale indicates a strategic realignment with a focus on liquidity and asset management. The Renaissance Nashville is a significant property and securing favorable refinancing terms for it highlights the property's value and the trust's creditworthiness. However, the sale of Westin Princeton needs to be seen in the context of the overall portfolio strategy. If the proceeds are successfully reinvested in higher-yielding assets or used to reduce higher-cost debt, it could be a positive development. Investors might look favorably upon this proactive management, provided that the sales process of several assets does not indicate a distressed liquidation but rather an optimization of the portfolio. The condition of the hospitality market, including occupancy rates, average daily rates and revenue per available room, should be considered as these will influence the financial performance of Ashford's properties and hence the trust's revenues and dividends.

DALLAS, May 9, 2024 /PRNewswire/ -- Ashford Hospitality Trust, Inc. (NYSE: AHT) ("Ashford Trust" or the "Company") today announced that it has closed on the refinancing of the mortgage loan for the 673-room Renaissance Hotel in Nashville, Tennessee, which had a final maturity date in March 2026. 

The new, non-recourse loan totals $267.2 million, and has a two-year initial term with three one-year extension options, subject to the satisfaction of certain conditions.  The loan is interest only and provides for a floating interest rate of SOFR + 3.98%.  The previous loan totaled $240.0 million and included the 296-room Westin Hotel in Princeton, New Jersey.  As part of this refinancing, the Westin Princeton is now unencumbered and the Company has listed this property for sale.  The Company plans to use the excess proceeds from the refinancing for general corporate purposes including paying down the Company's strategic financing.

"We are pleased to announce the refinancing of the Renaissance Nashville on attractive terms with significant excess proceeds," said Rob Hays, Ashford Trust's President and Chief Executive Officer. "We continue to make solid progress in paying off our strategic financing and have several assets in the market at various stages of the sales process.  We look forward to providing more updates in the coming weeks."

Ashford Hospitality Trust is a real estate investment trust (REIT) focused on investing predominantly in upper upscale, full-service hotels.

Forward-Looking Statements

Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, among others, statements about the Company's strategy and future plans, including the Company's plan to pay down its strategic financing. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," "could," "plan," or similar expressions, we intend to identify forward-looking statements. Such statements are subject to numerous assumptions and uncertainties, many of which are outside of Ashford Trust's control.

These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: our ability to raise sufficient capital to pay off our strategic debt; our ability to repay, refinance, or restructure our debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; our projected operating results; completion of any pending transactions; our understanding of our competition; market trends; projected capital expenditures; the impact of technology on our operations and business; general volatility of the capital markets and the market price of our common stock and preferred stock; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the markets in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are more fully discussed in Ashford Trust's filings with the Securities and Exchange Commission.

The forward-looking statements included in this press release are made only as of the date of this press release. Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks when you make an investment decision concerning our securities. Investors should not place undue reliance on these forward-looking statements. The Company can give no assurance that these forward-looking statements will be attained or that any deviation will not occur. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations, or otherwise, except to the extent required by law.

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SOURCE Ashford Hospitality Trust, Inc.

FAQ

<p>What is the latest news regarding Ashford Hospitality Trust, Inc. (AHT)?</p>

Ashford Hospitality Trust, Inc. (NYSE: AHT) has successfully completed the refinancing of the mortgage loan for the Renaissance Hotel in Nashville, Tennessee.

<p>How much was the new loan obtained for the Renaissance Hotel in Nashville?</p>

The new loan obtained for the Renaissance Hotel in Nashville is $267.2 million.

<p>What will the excess proceeds from the refinancing be used for?</p>

The excess proceeds from the refinancing will be used for general corporate purposes and to pay down the company's strategic financing.

<p>What type of company is Ashford Hospitality Trust?</p>

Ashford Hospitality Trust is a real estate investment trust (REIT) focused on investing predominantly in upper upscale, full-service hotels.