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Extended Stay obtains $50 million, $350 million five-year revolvers
By Tali Rackner
Norfolk, Va., Sept. 1 – Extended Stay America, Inc. entered into a $50 million five-year revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.
In addition, ESH Hospitality, Inc. entered into a $350 million five-year revolving credit facility.
Interest under the Extended Stay revolver is equal to Libor plus 300 basis points. In addition, if 50% or more of the facility is drawn, there is an unused fee of 17.5 bps, and if less than 50% of the facility is drawn, the unused fee is 35 bps.
Certain financial covenants require Extended Stay to maintain a maximum consolidated leverage ratio as of the end of any fiscal quarter of 8.75 times.
Interest under the ESH Hospitality revolver is Libor plus a 225 bps to 275 bps, depending on the company’s consolidated total net leverage ratio. In addition, if 50% or more of the facility is drawn, there is an unused fee of 17.5 bps, and if less than 50% of the facility is drawn, the unused fee is 35 bps.
The revolver is in addition to a $1.3 billion seven-year term loan facility at ESH. There is an up to $600 million accordion feature.
Both revolving credit facilities mature on Aug. 30, 2021.
Deutsche Bank AG, New York Branch, is the administrative agent both facilities. Deutsche Bank Securities Inc., JPMorgan Chase Bank, NA, Goldman Sachs Bank USA, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Inc., Barclays, Morgan Stanley Senior Funding, Inc. and Macquarie Capital (USA) Inc. are the joint lead arrangers and bookrunners.
The lodging real estate investment trust is based in Charlotte, N.C.
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