Sunstone Hotel Investors, Inc. has announced the completion of a $1.35 billion Amended and Restated Credit Agreement with an aggregate borrowing capacity. This agreement is intended to address near term maturities, extend the duration of remaining loans, and strengthen the company's balance sheet. The Amended Credit Agreement consists of a $500 million revolving credit facility, a $275 million delayed-draw term loan facility, a $275 million term loan facility, and a $300 million term loan facility, with varying initial maturities from 2029 to 2031.
Additionally, the company has entered into interest rate swaps to lower its borrowing costs and manage interest rate risk, resulting in over 75% of its debt and preferred equity being subject to fixed rates. The company utilized the proceeds from the incremental borrowing on the new term loans to consolidate its prior four term loans into three loans and fully repay the outstanding balance on its revolving credit facility.
Furthermore, the company is delaying the draw of up to $90 million under the $275 million delayed-draw term loan facility until January 2026 and expects to use the majority of the proceeds to repay the Series A Senior Notes at their scheduled maturity. Following this repayment, the company will not have any debt maturities until 2028.
Sunstone's unsecured credit facilities are led jointly by several financial institutions, with Wells Fargo Bank, National Association, serving as the Administrative Agent. The company's strategy as a lodging real estate investment trust is to create long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate. Following these announcements, the company's shares moved 1.9%, and are now trading at a price of $9.64. If you want to know more, read the company's complete 8-K report here.
