News for the Hospitality Executive
DiamondRock Acquires the 166-room Renaissance Charleston
Historic District Hotel for $39 million
Completes $200 Million Unsecured Credit Facility
BETHESDA, Md., Aug. 9, 2010 - DiamondRock Hospitality Company (the "Company") (NYSE: DRH) announced it closed a $200 million senior unsecured revolving credit facility. The interest rate for the new facility ranges from 275 to 375 basis points over LIBOR, depending on the Company's leverage. The facility has a LIBOR floor of 100 basis points. The senior unsecured revolving credit facility may increase to $275 million subject to lenders' consent, and the term of the facility is 36 months, which may be extended for an additional 12 months upon satisfaction of certain standard conditions.
The facility was co-led by Wells Fargo Securities, LLC and Banc of America Securities LLC who acted as Joint Lead Arrangers and Joint Bookrunners. Wells Fargo Bank, National Association is acting as the Administrative Agent and Bank of America, N.A. as the Syndication Agent. Deutsche Bank Securities Inc. and Citibank, N.A. are Co-Documentation Agents. Additional lenders are KeyBank National Association, PNC Bank, National Association, Morgan Stanley Senior Funding, Inc. and Goldman Sachs Bank USA.
The Company also announced that it completed the acquisition of the 166-room Renaissance Charleston Historic District Hotel (the "Hotel") for a contractual purchase price of $39 million. The acquisition was funded with the Company's existing corporate cash. The acquisition was sourced through the Company's strategic sourcing relationship with Marriott International, Inc. (NYSE: MAR).
The total investment of $40 million represents slightly less than 11 times the Hotel's forward 12-month earnings before interest expense, taxes, depreciation and amortization (or "EBITDA") of approximately $3.7 million. The Hotel manager, a subsidiary of Marriott International, Inc., currently projects the Hotel to generate RevPAR growth above 8% for 2010. The Hotel is projected to generate approximately $1.3 million of EBITDA during the Company's ownership period in 2010.
"We are pleased to leverage our Marriott strategic sourcing relationship to acquire a well-positioned asset in a high barrier-to-entry destination location at an attractive purchase price. The Hotel is positioned to benefit from general economic recovery plus several exciting market-specific demand generators such as the expansion of the Boeing plant and the addition of new routes by Southwest Airlines," stated Mark W. Brugger, Chief Executive Officer of the Company.
The Hotel is located in Charleston's Historic District and is proximate to the historical attractions, shopping and dining in downtown Charleston. Charleston hosts approximately 4.0 million visitors per year, generating $2.8 billion in tourism revenue annually.
Charleston is recognized for its historic significance, Southern charm and coastal beauty. The Company expects that the Hotel will benefit from Charleston's reputation as a top leisure destination.
Reconciliation of the Renaissance Charleston Historic District Hotel Net Income to EBITDA
About the Company
This press release contains forward-looking statements within the meaning
of federal securities laws and regulations.
DiamondRock Hospitality Company
|Also See:||The Peabody Hotel Group Names the Hilton Greenville, South Carolina the PHG Hotel of The Year, 2005 / April 2006|