Host Hotels & Resorts, Inc. Announces Pricing Of $600 Million Of 3.50% Senior Notes Due 2030 By Host Hotels & Resorts, L.P.

Rhea-AI Summary

Host Hotels & Resorts, L.P., a subsidiary of Host Hotels & Resorts, has priced its offering of $600 million in 3.50% Senior Notes due 2030. The offering is set to close on August 20, 2020, pending customary conditions. Estimated net proceeds are approximately $588 million, intended for eligible green projects and to repurchase existing senior notes. The offering is managed by major financial institutions, including J.P. Morgan and Goldman Sachs. The press release includes forward-looking statements about ongoing transactions and risks associated with the COVID-19 pandemic.

Positive

• Successful pricing of $600 million Senior Notes could improve the company's liquidity.
• Net proceeds intended for eligible green projects align with sustainability trends.

Negative

• Company faces risks related to the COVID-19 pandemic affecting travel demand.
• Dependence on market conditions for the successful closure of the Offering.

BETHESDA, Md., Aug. 11, 2020 (GLOBE NEWSWIRE) -- Host Hotels & Resorts, Inc. (NYSE: HST) (the “Company”), the nation’s largest lodging real estate investment trust, today announced that Host Hotels & Resorts, L.P. ("Host L.P."), for whom the Company acts as sole general partner, has priced its offering (the "Offering") of $600 million aggregate principal amount of 3.50% Senior Notes due 2030 (the "Notes"). The Offering is expected to close on August 20, 2020, subject to the satisfaction or waiver of customary closing conditions. 

The estimated net proceeds of the Offering, after deducting the underwriting discount, original issue discount and fees and expenses, are expected to be approximately $588 million. Host L.P. intends to allocate an amount equal to the net proceeds from the sale of the Notes to one or more eligible green projects, including the previous acquisitions of the W Hollywood Hotel in California and the 1 Hotel South Beach in Miami Beach, Florida, each of which has received LEED Silver certification. Host L.P. intends to use the net proceeds from the sale of the Notes to purchase for cash any and all of Host L.P.’s outstanding $450 million principal amount of 4.750% Series C senior notes that are tendered in connection with the tender offer launched on the date hereof (the “Tender Offer”). Proceeds from the Offering not used to pay for the notes that are tendered in the Tender Offer will be used for general corporate purposes, which may include repurchases of debt.

J.P. Morgan Securities LLC, BofA Securities, Inc., Wells Fargo Securities, LLC, Deutsche Bank Securities, Goldman Sachs & Co. LLC and Morgan Stanley are the joint book-running managers for the Offering.

The Offering is being made pursuant to an effective shelf registration statement and accompanying prospectus filed with the Securities and Exchange Commission on April 12, 2018 and a preliminary prospectus supplement filed with the Securities and Exchange Commission on August 11, 2020. A copy of the final prospectus supplement and the accompanying prospectus relating to the Notes may be obtained, when available, by contacting J.P. Morgan Securities LLC, at 383 Madison Avenue, New York, NY 10179, Attention: Investment Grade Syndicate Desk – 3rd Floor, or by calling (212) 834-4533; BofA Securities, Inc., at 200 North College Street, NC1-004-03-43, Charlotte, NC 28255-0001, Attention: Prospectus Department, or by calling toll free (800) 294-1322 or by email at dg.prospectus_requests@bofa.com; and Wells Fargo Securities, LLC, 608 2^nd Avenue South, Suite 1000, Minneapolis, MN 55402, Attn: WFS Customer Service, telephone (800) 645-3751 or email: wfscustomerservice@wellsfargo.com. This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the securities, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state.

This press release contains information about pending transactions, and there can be no assurance that these transactions will be completed.

Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “plan,” “predict,” “project,” “will,” “continue” 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: the duration and scope of the COVID-19 pandemic and its short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence; actions governments, businesses and individuals take in response to the pandemic, including limiting or banning travel; the impact of the pandemic and actions 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, business investment and consumer discretionary spending; the pace of recovery when the COVID-19 pandemic subsides; general economic uncertainty in U.S. markets where we own hotels and a worsening of economic conditions or low levels of economic growth in these markets; the effects of steps we and our hotel managers take to reduce operating costs in response to the COVID-19 pandemic; our ability to close this Offering and apply the proceeds as currently intended; our ability to use or allocate the net proceeds from this Offering to eligible green projects that will satisfy, or continue to satisfy, investor criteria and expectations regarding environmental impact and sustainability performance; 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 that will affect occupancy rates at our hotels and the demand for hotel products and services; the impact of geopolitical developments outside the U.S. on lodging demand; volatility in global financial and credit markets; operating risks associated with the hotel business; risks and limitations in our operating flexibility associated with the level of our indebtedness and our ability to meet covenants in 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 our hotel occupancy and financial results; our ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; risks associated with our ability to complete acquisitions and dispositions and develop new properties and the risks that acquisitions and new developments may not perform in accordance with our expectations; our ability to continue to satisfy complex rules in order for us to remain a real estate investment trust for federal income tax purposes; risks associated with our ability to effectuate our dividend policy, including factors such as operating results and the economic outlook influencing our board’s decision whether to pay further dividends at levels previously disclosed or to use available cash to make 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 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.

Tejal Engman
Investor Relations
(240) 744-5116
ir@hosthotels.com

FAQ

What is the purpose of Host Hotels & Resorts' recent $600 million bond offering?

The bond offering aims to support eligible green projects and repurchase existing senior notes.

When is the closing date for Host Hotels & Resorts' bond offering?

The bond offering is expected to close on August 20, 2020.

What are the risks mentioned in Host Hotels & Resorts' press release?

Risks include impacts from the COVID-19 pandemic on travel demand and economic uncertainty.

What financial institutions are involved in Host Hotels & Resorts' bond offering?

J.P. Morgan, Goldman Sachs, and several other major banks are managing the offering.

How much are the estimated net proceeds from Host Hotels & Resorts' bond offering?

The estimated net proceeds are approximately $588 million after fees and expenses.