DALLAS—Doug Vicari doesn’t view the US$275 million in debt coming due for Chesapeake Lodging Trust in 2014 as a threat—he views it as an opportunity.
The debt is comprised of the Annapolis, Maryland=based real-estate investment trust’srevolving credit facility and term loan, said Vicari, Chesapeake’s CFO, executive VP, treasurer and trustee, during a webcast of the company’s investor presentation at the Hilton Anatole in Dallas.
“I know some people would look at it as a risk,” he said, “but this (loan) gives us lots of flexibility. This will create a lot of value for the company.” The term loan is secured by hotels that will be cash-flowing in 2014, he added; the properties are the Le Méridien San Francisco and W Chicago-City Center.
The term loan bears interest at the London Interbank Offered Rate or LIBOR, plus 3.65% subject to a LIBOR floor of 1%.
The interest rate on the credit facility bears interest at LIBOR plus 2.75% to 3.75%.
Total long-term debt at Chesapeake was US$363.3 million as of 30 September 2011.
“Given where we are today, I’m happy with how our balance sheet has evolved,” Vicari said, adding, “We have relatively low leverage for a company that’s been growing quickly.”
Contact:
Chesapeake Lodging Trust
CFO, Doug Vicari
Phone: 410-972-4142
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