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SOURCE DiamondRock Hospitality Company
Replaces Existing High Cost and Low LTV Loan
BETHESDA, Md., July 21, 2014 /PRNewswire/ -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH) today announced that it entered into a new $86 million mortgage loan secured by the Courtyard New York Manhattan / Midtown East. The new loan matures in 2024 and bears interest at a fixed rate of 4.40%. The new loan is interest-only for the first two years after which principal will amortize over 30 years. The hotel was previously encumbered by a $41.3 million mortgage loan bearing interest at 8.81%.
"We are pleased to take advantage of the current low interest rate environment by locking into a 4.40% interest rate for 10 years. Further, loan proceeds are approximately 10% higher than our total investment in the hotel and the loan will achieve our strategic objective of further laddering our debt maturities," stated Sean Mahoney, Executive Vice President and Chief Financial Officer of the Company.
The Company used proceeds from the new loan to fully repay the $41.3 million outstanding on the existing mortgage loan. The remaining excess proceeds will be used to build capacity for future opportunistic investments. After the completion of this loan, 11 of the Company's 25 hotels remain unencumbered by property-specific mortgage debt. The refinancing lowered the Company's weighted average interest rate by approximately 20 basis points to 4.98%.
About the Company
DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in top gateway markets and destination resort locations. The Company owns 25 premium quality hotels with over 10,700 rooms. The Company has strategically positioned its hotels to generally be operated under leading global brands such as Hilton, Marriott, and Westin. For further information on the Company and its portfolio, please visit DiamondRock Hospitality Company's website at www.drhc.com.
This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms and phrases such as "believe," "expect," "intend," "project," "anticipate," and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: national and local economic and business conditions that will affect occupancy rates at our hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of our indebtedness and our ability to meet covenants in our debt agreements; our ability to complete acquisitions; the performance of acquired properties after they are acquired; necessary capital expenditures on the acquired properties; and our ability to continue to satisfy complex rules in order for us to qualify as a REIT for federal income tax purposes; and other risks and uncertainties associated with our business described from time to time in our filings with the Securities and Exchange Commission. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of the date of this release, and we undertake no obligation to update any forward-looking statement to conform the statement to actual results or changes in our expectations.
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