DiamondRock Hospitality Company Completes Refinancing of Salt Lake City Marriott Downtown

Rhea-AI Summary

DiamondRock Hospitality Company (NYSE: DRH) has successfully refinanced its near-term debt by obtaining a $48 million mortgage loan secured by the Salt Lake City Marriott Downtown. The new loan replaces an existing $52.5 million mortgage and matures in January 2022, with an option for a one-year extension. This refinancing strengthens DiamondRock's balance sheet, providing financial flexibility amidst the COVID-19 pandemic. The company's total debt maturity includes $2.9 million in 2020 and $333.3 million due in 2023, totaling to $423.3 million in 2024.

Positive

• Successfully refinanced $48 million loan, enhancing financial flexibility.
• Replaced $52.5 million mortgage, reducing near-term debt obligations.
• Improved balance sheet amidst COVID-19 challenges.

Negative

• Remaining debt obligations include $333.3 million in 2023 and $423.3 million in 2024.
• Ongoing impact of COVID-19 on travel demand may affect occupancy rates.

BETHESDA, Md., June 30, 2020 /PRNewswire/ -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH) announced today that it has refinanced its only material near-term debt obligation by closing on a $48 million mortgage loan secured by the Salt Lake City Marriott Downtown. 

"This new loan further bolsters DiamondRock's balance sheet and provides financial flexibility during the current disruption in travel demand caused by COVID-19," said Mark W. Brugger, President and Chief Executive Officer of DiamondRock Hospitality Company.

The loan proceeds were used to repay the existing $52.5 million mortgage loan secured by the Salt Lake City Marriott Downtown.  The new loan matures in January 2022 with an option to extend maturity to January 2023, subject to the satisfaction of certain conditions.  The new loan bears interest at LIBOR plus 325 basis points over a 100 basis points LIBOR floor.

The Company's debt maturity schedule is now as follows:

Year	Debt at Maturity(1)
2020	$2.9 million
2021	None
2022	$45.3 million
2023(2)	$333.3 million
2024	$423.3 million
2025	$290.0 million

(1)	Does not reflect extension options
(2)	Includes revolving credit facility based on $149.0 million balance at June 30, 2020

About the Salt Lake City Marriott Downtown

The 510-room Salt Lake City Marriott Downtown is one of Salt Lake City's premier hotels, having won AAA's Four Diamond Award for more than 20 consecutive years. The property offers approximately 22,000 square feet of meeting space. The hotel is located directly across from the Salt Palace Convention Center and is connected to the Crossroads Plaza Mall, as well as being minutes from numerous other top attractions.

About the Company

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that owns a portfolio of hotels located in highly desirable destination resort markets and key gateway cities.  The Company's 31 high quality hotels contain over 10,000 rooms and are strategically positioned under either leading global brands or as unique boutique hotels/resorts in the lifestyle segment.  For further information on the Company and its portfolio, please visit DiamondRock Hospitality Company's website at www.drhc.com.

This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms and phrases such as "believe," "expect," "intend," "project," "forecast," "plan" and other similar terms and phrases, 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 which may cause the 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: national and local economic and business conditions, including the impact of COVID-19 on occupancy rates at the Company's hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of the Company's indebtedness; relationships with property managers; the ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; and other risk factors contained in the Company's filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of the date of this release, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.

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SOURCE DiamondRock Hospitality Company

FAQ

What recent financial action did DiamondRock Hospitality Company take regarding its debt?

DiamondRock Hospitality Company refinanced its near-term debt by closing a $48 million mortgage loan secured by the Salt Lake City Marriott Downtown.

How much was DiamondRock's previous mortgage loan before refinancing?

The previous mortgage loan before refinancing was $52.5 million.

What is the maturity date of the new loan obtained by DiamondRock?

The new loan matures in January 2022, with an option to extend to January 2023.

How does the refinancing impact DiamondRock's overall debt maturity schedule?

The refinancing reduces immediate debt obligations, with $2.9 million due in 2020 and $333.3 million due in 2023.

What challenges does DiamondRock Hospitality Company face due to COVID-19?

DiamondRock faces challenges from decreased travel demand which may impact hotel occupancy rates.