IRVINE, Calif., Dec. 23, 2020 /PRNewswire/ — Sunstone Hotel Traders, Inc. (the “Firm” or “Sunstone”) (NYSE: SHO), the owner of Very long-Expression Applicable Genuine Estate® in the hospitality sector, announced right now that it has accomplished a collection of stability sheet enhancing transactions that involve: extending the waiver time period of the economic covenant tests on the Company’s $500 million undrawn revolving credit facility, $185 million of funded time period personal loan facilities and $205 million of remarkable private placement senior notes (“Unsecured Debt Amenities”) addressing its remaining in close proximity to-term maturities supplying resolution with the specific servicer on the house loan personal loan secured by the Hilton Moments Square and, decreasing the Firm’s regular monthly dollars burn off.
John Arabia, President and CEO, stated, “We are delighted to announce the 2nd amendment of our unsecured credit card debt agreements, extending the covenant reduction period through the to start with quarter 2022, which will offer you elevated overall flexibility and present the Corporation with the vital in the vicinity of-term covenant reduction and the capacity to commit in acquisition opportunities that arise. We respect the mind-boggling assist from our lengthy-standing lender and noteholder associations, especially offered the hard setting. On top of that, we were in a position to further bolster our equilibrium sheet and deal with our remaining close to-time period maturities by reaching a resolution with the lender on the Hilton Times Square and arranging for the reimbursement of the mortgage loan secured by the Renaissance Washington DC, which we anticipate to have finalized by the stop of the calendar year.”
Credit history Facility, Expression Personal loan and Senior Unsecured Notes Covenant Waiver Extension
The Business has properly accomplished next amendments to the agreements governing its in-place Unsecured Credit card debt Facilities. The amended Unsecured Financial debt Facilities increase the covenant waiver period from June 30, 2021 to March 31, 2022. Additionally, the amendments prolong the modification of the demanded quarterly-tested economic covenants to ease compliance for four quarters pursuing the close of the covenant waiver time period. The Firm will be essential to retain sure minimum liquidity thresholds right up until it is in a position to fulfill its pre-amendment economic covenants. As aspect of the 2nd amendments, the Firm has been granted the potential to use the net proceeds gained from the earlier done sale of the Renaissance Los Angeles Airport to repay the property finance loan loan secured by the Renaissance Washington DC. The compensation of the bank loan will eliminate approximately $9.7 million of once-a-year credit card debt company and will depart the Corporation with only three mortgages remaining. Upon the early compensation of the mortgage, the Renaissance Washington DC will be added as a guarantor of the Unsecured Credit card debt Amenities. All other monetary covenants continue being substantively the similar as the prior modification. The Corporation does not have any quantities drawn on its $500 million revolving credit facility.
Hilton Instances Sq. Resolution
The Enterprise has properly executed an settlement with the holder of the home finance loan mortgage secured by the Hilton Situations Square. In trade for a $20 million payment, the credit history of somewhere around $3 million of limited cash held by the noteholder, the assignment of the Firm’s desire in the hotel, and the retention of sure possible worker related obligations, the Enterprise has content all fantastic personal debt obligations, which includes typical and default interest or late prices that may be assessed. On top of that, the Organization expects to generate off around $22 million of several accrued costs associated to the leasehold fascination in the home, such as, but not confined to, accrued taxes, payments in lieu of taxes, accrued floor hire, and accrued easement payments. The Enterprise expects to remove the internet property and liabilities associated to the lodge from its balance sheet for the period finished December 31, 2020, but may keep sure contingent liabilities till those objects have been solved.
About Sunstone Lodge Traders, Inc.
Sunstone Resort Buyers, Inc. is a lodging authentic estate expenditure belief (“REIT”) that as of the date of this release has interests in 17 motels comprised of 9,017 rooms. Sunstone’s organization is to acquire, personal, asset manage and renovate or reposition hotels thought of to be Long-Expression Appropriate Authentic Estate®, the greater part of which are operated underneath nationally regarded brands, this sort of as Marriott, Hilton and Hyatt. For further info, remember to check out Sunstone’s web-site at www.sunstonehotels.com.
This press launch has ahead-seeking statements inside the this means of federal securities regulations and restrictions. These ahead-hunting statements are recognized by their use of phrases and phrases such as “anticipate,” “believe,” “go on,” “could,” “estimate,” “be expecting,” “intend,” “could,” “system,” “forecast,” “undertaking,” “should,” “will” and other very similar phrases and phrases, like opinions, references to assumptions and forecasts of future benefits. Forward-looking statements are not guarantees of future general performance and include regarded and unidentified hazards, uncertainties and other elements that may cause the genuine results to vary materially from all those expected at the time the ahead-hunting statements are made. These challenges incorporate, but are not restricted to: the effect on the Company’s company of the COVID-19 worldwide pandemic and the response of governments and the Company to the outbreak amplified risks relevant to personnel issues, including enhanced employment litigation and claims for severance or other gains tied to termination or furloughs as a end result of short term resort suspensions or minimized lodge operations due to COVID-19 the effects on our company of present defaults or probable defaults by us on our credit card debt agreements or leases general financial and organization situations, which include a U.S. economic downturn, trade conflicts and tariffs among the U.S. and its trading partners, adjustments in the European Union or worldwide financial slowdown, which might diminish the desire for leisure travel or the have to have for business journey, as properly as any sort of flu or condition-connected pandemic or the adverse outcomes of local climate improve, impacting the lodging and vacation business, internationally, nationally and domestically the Firm’s want to run as a REIT and comply with other relevant rules and regulations, which includes new laws, interpretations or court decisions that may perhaps adjust the federal or condition tax legal guidelines or the federal or state money tax outcomes of the Company’s qualification as a REIT mounting resort operating prices due to labor costs, workers’ compensation and wellbeing-care connected expenditures, including the effect of the Individual Protection and Affordable Care Act or its possible alternative, utility costs, insurance and unanticipated costs these types of as acts of character and their outcomes and other factors that may well not be offset by elevated area premiums relationships with, and the requirements and reputation of, the Company’s franchisors and lodge manufacturers relationships with, and the prerequisites, functionality and popularity of, the administrators of the Firm’s lodges the floor, making or airspace leases for 3 of the 17 Motels the Firm has passions in as of the day of this release competitiveness for the acquisition of accommodations, and the Company’s ability to total acquisitions and inclinations effectiveness of resorts after they are obtained new hotel offer, or alternate lodging choices this kind of as timeshare, vacation rentals or sharing providers such as Airbnb, in the Company’s markets, which could harm its occupancy levels and profits at its motels opposition from hotels not owned by the Enterprise the will need for renovations, repositionings and other funds expenditures for the Firm’s accommodations the influence, which includes any delays, of renovations and repositionings on resort functions variations in the Company’s small business technique or acquisition or disposition designs the Firm’s level of financial debt, which include secured, unsecured, mounted and variable rate debt fiscal and other covenants in the Firm’s financial debt and desired stock the Firm’s inns might turn out to be impaired, or its hotels which have earlier turn into impaired could turn into even further impaired in the future, which may well adversely have an affect on its economic issue and effects of operations volatility in the money marketplaces and the influence on lodging desire or the Company’s potential to acquire funds on favorable conditions or at all possible adverse tax repercussions in the function that the Firm’s functioning leases with its taxable REIT subsidiaries are not held to have been manufactured on an arm’s-size basis procedure safety challenges, data defense breaches, cyber-attacks, including those people impacting the Company’s lodge professionals or other 3rd events, and techniques integration challenges other functions beyond the Company’s handle, which includes natural disasters, terrorist assaults or civil unrest and other challenges and uncertainties affiliated with our enterprise explained in the Firm’s filings with the Securities and Trade Commission. Despite the fact that the Firm thinks the anticipations reflected in such forward-hunting statements are primarily based on sensible assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be content. All forward-hunting info offered herein is as of the day of this release, and the Firm undertakes no obligation to update any forward-hunting statement to conform the statement to actual effects or adjustments in the Company’s anticipations.
This release need to be read through with each other with the consolidated financial statements and notes thereto integrated in our most latest studies on Kind 10-K and Sort 10-Q. Copies of these experiences are accessible on our internet site at www.sunstonehotels.com and by means of the SEC’s Digital Information Collecting Examination and Retrieval Procedure (“EDGAR”) at www.sec.gov.
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