SIOUX FALLS, S.D.--(BUSINESS WIRE)--
Summit Hotel Properties, Inc. (the “Company”) (NYSE: INN), a real estate
investment trust (REIT) specializing in the ownership of premium-branded
hotels in the upscale and upper midscale segments, today announced a
number of debt refinancing initiatives.
On October 3, 2011, the Company and ING Investment Management, LLC
(“ING”) agreed to a non-binding term sheet pursuant to which the Company
plans to refinance and consolidate all four of the Company’s outstanding
loans with ING, which as of June 30, 2011 collectively had an aggregate
outstanding principal balance of approximately $71.0 million, were
secured by 16 of the Company’s hotel properties and bore interest at a
weighted-average rate of 5.97%, into a single 7-year term loan with a
principal balance of $67.5 million, amortized over 20 years and bearing
an annual interest rate of 6.10%, collateralized by first mortgages on
16 of the Company’s hotel properties containing an aggregate of 1,639
guestrooms. After taking into account the continuing amortization of the
existing loans through closing and the proceeds of the new loan, the
Company expects to fund at closing approximately $1.0 million of
principal paydown with available cash or a draw on its revolving credit
facility. In May 2011, ING Investment Management, LLC (“ING”) notified
the Company that ING was exercising its contractual right to declare the
entire principal balance and accrued but unpaid interest on its $28.3
million loan to the Company, which is included in the four ING loans
described above, to become due and payable on January 1, 2012. As
previously disclosed, ING has the right to call the loan at January 1,
2012, January 1, 2017 and January 1, 2022. The Company is working with
ING to complete final documentation for this new loan structure prior to
January 1, 2012 and expects that the new loan will be funded by the end
of the first quarter of 2012. However, the Company can give no
assurances that it will be able to refinance the four ING loans or any
of them on these terms within the expected timeframe or at all.
The $28.3 million loan with ING described above was included in the
amount shown as debt obligations due in less than one year previously
disclosed in the Quarterly Report on Form 10-Q for the quarter ended
June 30, 2011 filed by the Company and Summit Hotel OP, LP with the
Securities and Exchange Commission on August 15, 2011 (as amended on
August 31, 2011).
In addition to the ING loans which the Company expects to refinance as
described above, since June 30, 2011, the Company has modified or
refinanced approximately $43.0 million in outstanding principal balance
of indebtedness. On August 12, 2011, the Company modified all three of
its General Electric Capital Corp. (“GECC”) loans, which had an
aggregate outstanding principal balance at June 30, 2011 of
approximately $30.3 million. After giving effect to the modification,
the GECC loans, which now amortize over 20 or 25 years with balloon
payments of approximately $10.2 million on April 1, 2014, approximately
$6.3 million on April 1, 2018 and approximately $8.6 million on March 1,
2019, now bear a rate of interest equal to 90-day LIBOR plus 3.50%. On
September 30, 2011, the Company refinanced its Bank of the Cascades
loan, which had an outstanding principal balance at June 30, 2011 of
approximately $12.6 million, to have a new maturity date of September
30, 2021 and a fixed interest rate of 4.66% through September 29, 2016
and a fixed interest rate thereafter based on the then-current Federal
Home Loan Bank of Seattle Intermediate/Long-Term, Advances Five-year
Fixed Rate plus 3.00%.
Stuart Becker, Summit’s Executive Vice President and Chief Financial
Officer stated, “Securing these refinancings allows us to take advantage
of current attractive interest rates and manage our debt maturities.”
About Summit Hotel Properties
Summit Hotel Properties, Inc. is a self-advised real estate investment
trust focused on acquiring and owning premium-branded select-service
hotels in the upscale and upper midscale segments. As of October 13,
2011, the Company’s hotel portfolio consisted of 70 hotels with a total
of 7,100 guestrooms located in 19 states. Additional information about
Summit may be found at the Company’s website, www.shpreit.com.
Forward Looking Statement
Certain matters within this press release are discussed using
forward-looking language as specified in the Private Securities
Litigation Reform Act of 1995, and, as such, may involve known and
unknown risks, uncertainties and other factors that may cause the actual
results or performance to differ from those projected in the
forward-looking statement. These forward-looking statements include
statements related to the Company’s ability to continue to execute its
strategy by selectively expanding the portfolio while continuing to
maximize the operating results of its existing portfolio and its ability
to obtain new financing and complete refinancings of existing debt. For
a description of factors that may cause the Company’s actual results or
performance to differ from its forward-looking statements, please review
the information under the heading “Risk Factors” included in the
Company’s Annual Report on Form 10-K for the year ended December 31,
2010, as filed with the Securities and Exchange Commission.
(Media)
Daly Gray Public Relations
Jerry Daly, Carol
McCune, 703-435-6293
jerry@dalygray.com
or
(Investors)
Summit
Hotel Properties, Inc.
Dan Boyum, 605-782-2015
dboyum@shpreit.com
Source: Summit Hotel Properties, Inc.