Condor Hospitality Trust, Inc., a hotel-focused real estate investment trust (REIT) headquartered and incorporated in the state of Maryland, announced that it has executed a commitment letter with two lenders for a $90 million senior secured credit facility. KeyBank and The Huntington National Bank are the joint lead arrangers for the revolving credit facility with KeyBank serving as administrative agent and The Huntington National Bank serving as syndication agent.
The commitment letter provides for a revolving credit facility with an initial size of $90 million and includes an accordion feature that would allow the Company to increase the size of the facility to $400 million. The facility matures in two years and has an automatic one-year extension upon the completion of specific capital achievements. The facility has two additional one-year extension options following additional capital achievements. Borrowings will bear interest at a rate determined by a leverage-based pricing grid.
“We are very pleased with the commitment letter provided by both KeyBank and The Huntington National Bank and we look forward to closing the proposed credit facility. This is another significant milestone for Condor as the proposed credit facility will further solidify the Company’s balance sheet by reducing the Company’s weighted average cost of debt from approximately 5.4% to 4.7%, translating to approximately $0.7 million in annual interest cost savings. Additionally, it will lengthen the Company’s weighted average debt maturity to 2.9 years and accelerate the closing of acquisitions, including the recently announced acquisition of four Home2 Suites hotels,” said Jonathan J. Gantt, Condor’s Chief Financial Officer. “We believe this new facility is a strong indicator of Condor’s credit-worthiness and our standing within the industry as a leading hotel REIT focused exclusively on premium-branded, select-service hotels in the top 100 MSAs,” Mr. Gantt continued.
The closing of the facility is expected to occur in the first quarter of 2017 upon successful completion of certain diligence items and closing conditions including executed loan documents and compliance with financial covenants customary for corporate credit facilities of this type.