Chesapeake Lodging Trust Obtains $60MTerm Loan
$25M was advanced by the lender and is secured by the 122-room Holiday Inn New York City Midtown - 31st Street.
July 6, 2012 - Chesapeake Lodging Trust (NYSE: CHSP) announced today that it has closed on a $60.0 million two-year term loan. The loan was provided by Wells Fargo Bank, N.A., and subject to certain customary conditions, provides for three one-year extensions. At the initial closing, $25.0 million was advanced by the lender and is secured by the 122-room Holiday Inn New York City Midtown - 31st Street. The remaining $35.0 million is expected to be advanced by the lender upon closing on our acquisition of the Hyatt Place New York Midtown South and satisfaction of certain customary closing conditions. Following that subsequent closing, the entire $60.0 principal amount of the loan will be secured by both hotels. The loan bears interest equal to LIBOR, plus 3.25%.
Contemporaneous with the closing of the term loan, the Trust entered into an interest rate swap to effectively fix the interest rate on the initial $25.0 million advance for the original two-year term at 3.75% per annum. The Trust also expects to enter into an interest rate swap to fix the interest rate on the subsequent $35.0 million advance over the remaining term of the loan. Proceeds from the loan will be used to repay outstanding borrowings under the Trust's revolving credit facility.
Chesapeake Lodging Trust is a self-advised lodging real estate investment trust (REIT) focused on investments primarily in upper-upscale hotels in major business and convention markets and, on a selective basis, premium select-service hotels in urban settings or unique locations in the United States. The Trust owns 12 hotels with an aggregate of 3,516 rooms in six states and the District of Columbia.
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