DiamondRock Hospitality Company Provides Update on Capital Initiatives (United States)
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DiamondRock Hospitality Company Provides Update on Capital Initiatives (United States)
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Category: North America & West Indies / Carribean islands - United States - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2009-09-15
DiamondRock Hospitality Company (NYSE:DRH) today provided an update on its recent capital initiatives. The highlights are as follows:
-- Courtyard Manhattan/Midtown East Financing: On September 11, 2009, the Company refinanced the debt that was secured by a mortgage on its Courtyard Manhattan/Midtown East hotel with new $43.0 million secured debt issued by Massachusetts Mutual Life Insurance Company maturing on October 1, 2014. The existing $40.5 million of debt was scheduled to mature on December 11, 2009.
-- Controlled Equity Program Update and Revised Share Guidance: During the third quarter, the Company raised gross proceeds of $57.3 million through the sale of 8.1 million shares of common stock under our $75 million controlled equity offering program (average sale price of $7.05). Including all shares sold under the program, the Company had approximately 116.2 million shares outstanding as of September 11, 2009, which was the last day of its third fiscal quarter. Based solely on stock sales through the end of its third fiscal quarter, the Company expects to have approximately 106.2 million fully-diluted weighted average shares of its common stock for the year ended December 31, 2009.
-- Griffin Gate Marriott Debt Maturity: The Company provided notice to the servicer of the $28 million Griffin Gate Marriott mortgage debt that the Company intends to repay the loan during the fourth quarter of 2009. The mortgage debt matures on January 1, 2010 and is prepayable without penalty commencing October 1, 2009. After repayment of the mortgage debt, the hotel will be unencumbered.
-- Bethesda Marriott Suites Debt: The Company expects to repay the $5 million Bethesda Marriott Suites mortgage debt during the fourth quarter of 2009. The mortgage debt matures in July 2010 and is currently prepayable without penalty. After repayment of the mortgage debt, the hotel will be unencumbered.
Mark W. Brugger, Chief Executive Officer, commented: "DiamondRock continues to take prudent steps to manage its balance sheet in order to achieve the dual goals of weathering the economic storm and positioning the Company for growth through the acquisition of attractive opportunities at the appropriate time. Our recently completed capital initiatives have placed DiamondRock in a position of strength with a capital structure that has no corporate debt (including no preferred equity or draws on its corporate line of credit), ten of our twenty hotels unencumbered by mortgage debt, no debt maturities until late 2014, and meaningful unrestricted corporate cash. Moreover, these steps, particularly the equity issuance, are consistent with the Company's desire to operate at conservative leverage levels; after the completion of these initiatives the Company's total net debt will represent approximately 32% of hotel cost."
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