DiamondRock Hospitality Company (NYSE: DRH) has announced the successful completion of a $1.5 billion refinancing, marking a significant increase from its previous $1.2 billion facility. The refinancing has provided the company with additional financial flexibility and extended the maturities under its senior unsecured credit facility.
The credit facility now consists of a $400 million revolving credit facility maturing in January 2031, inclusive of two six-month extension options; a $500 million term loan maturing in January 2029, inclusive of two six-month extension options; a $300 million term loan maturing in January 2030; and a $300 million term loan maturing in January 2030, also inclusive of two six-month extension options. Notably, the term loans are prepayable at any time without penalty.
DiamondRock Hospitality Company has utilized the incremental $300 million of proceeds from the credit facility to repay three mortgage loans that either matured or are set to mature in 2025. These loans were secured by the Worthington Renaissance Fort Worth Hotel and the Hotel Clio, with a combined principal balance totaling approximately $125.0 million. Additionally, the company intends to prepay the $166.6 million mortgage loan secured by the Westin Boston Seaport District in September 2025. Following this repayment, the company will have no debt maturities until January 2028, and its portfolio will be fully unencumbered by secured debt.
Briony Quinn, the company's Executive Vice President, Chief Financial Officer, and Treasurer, expressed appreciation for the continued support of their lending partners and highlighted that maintaining low leverage and no debt maturities until 2028 increases the company's financial flexibility and positions it to take advantage of internal and external capital allocation opportunities over the next several years.
The refinancing was arranged by a consortium of financial institutions, with Wells Fargo Securities, LLC, BofA Securities, Inc., U.S. Bank National Association, and TD Bank, N.A. serving as joint lead arrangers and joint bookrunners of the credit facility. Other institutions also played significant roles in arranging various loans under the credit facility.
DiamondRock Hospitality Company, a self-advised real estate investment trust (REIT), currently owns 36 premium quality hotels and resorts with approximately 9,600 rooms. The company's strategic positioning of its portfolio in leading leisure destinations and top gateway markets has enabled it to operate under both global brand families and independent boutique hotels in the lifestyle segment. Following these announcements, the company's shares moved 1.78%, and are now trading at a price of $8.295. For more information, read the company's full 8-K submission here.
