Ashford Hospitality Trust obtains $200 million secured term loan

By Rebecca Melvin

New York, Dec. 28 – Ashford Hospitality Trust, Inc. said it has obtained a strategic financing commitment from funds managed by Oaktree Capital Management, LP for a $200 million senior secured term loan. In addition, the financing commitment can be upsized by $150 million to a total of $350 million, according to a company release.

The loan has a three-year term with two, one-year extension options subject to certain fees and tests.

It also allows the company the option to accrue the interest expense for up to two years, and Oaktree will be eligible to receive an exit fee that may be paid by the company in either cash or warrants.

The commitment is subject to customary conditions and is expected to close in the coming weeks, according to the release.

Ashford intends to use the net proceeds from this financing to strengthen its balance sheet, increase liquidity and for general corporate purposes.

RBC Capital Markets, LLC served as the company's financial adviser on the transaction.

"We're encouraged by the news regarding vaccines and believe this strategic financing commitment provides substantial capital and ample liquidity for Ashford Trust to capitalize on the upcoming recovery in the hospitality industry," J. Robison Hays, Ashford Trust's president and chief executive officer, said in the release.

Ashford is a Dallas-based real estate investment trust focused on luxury hotels.

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