Sunstone Provides Update for February 2009
SAN CLEMENTE, CA, March 16, 2009 - Sunstone Hotel Investors, Inc. (the "Company") (NYSE: SHO) today is providing an interim update on its operations through February and its recent capital markets activity. The Company does not undertake to make updates for any subsequent developments in its business.
Preliminary Operations Update
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February total portfolio RevPAR was $99.62, down 14.8% to prior year.
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Quarter to date through February 28, 2009, total portfolio RevPAR was $95.61, down 12.9% to prior year.
Arthur Buser, Chief Executive Officer, stated, "We remain focused on eliminating expenses, maximizing the cash flow of each hotel, enhancing our balance sheet and maintaining a strong liquidity position. So far during the quarter we continued to strengthen our balance sheet by repurchasing $64.0 million of our debt at an average price equivalent to 47.4% of par. With a recently renovated portfolio, a significant cash balance, and no near-term debt maturities, we continue to believe Sunstone is well positioned for the current phase of the cycle."
Finance Update
Through the date of this release, the Company has repurchased $64.0 million of its Operating Partnership's 4.6% Exchangeable Senior Notes due 2027 (the "Notes") at an average price equivalent to 47.4% of par, for gross cash consideration of $30.4 million. The Company used available cash to repurchase the Notes through unsolicited open market purchases.
Additionally, the Company has initiated negotiations with its bank group to restructure its credit facility. The Company is also in the process of soliciting bids for new mortgage debt on several of its unencumbered hotels. Given the challenges of the current financing market, the Company gives no assurances that either of these initiatives will be completed.
Ken Cruse, Chief Financial Officer, stated, "We repurchased Notes at a significant discount to par after considering both our liquidity maximization and our leverage reduction goals. Our credit facility and secured debt initiatives are consistent with our objective of maximizing liquidity and, if completed, we believe these transactions will meaningfully enhance our financial flexibility. "
Business Update Call
The Company will host a conference call to discuss its operations update on March 16, 2009, at 2 p.m. PDT. A live web cast of the call will be available via the Investor Relations section of the Company's website at www.sunstonehotels.com. Alternatively, investors may dial 1-800-240-8621 (for domestic callers) or 303-262-2142 (for international callers). A replay of the web cast will also be archived on the website.
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