Pebblebrook greenshoe exercised, lifting 8% preferreds to $85 million

By Toni Weeks

San Diego, Sept. 20 - Underwriters for Pebblebrook Hotel Trust's $75 million offering of 8% series B cumulative redeemable perpetual preferred stock exercised their overallotment option in full on Sept. 14, lifting the size of the issue to $85 million, the company said in an 8-K filed Tuesday with the Securities and Exchange Commission.

The company sold a total of 3.4 million series B preferreds at $25.00 apiece. The greenshoe consisted of 400,000 of those shares.

As previously reported, the preferreds are callable starting on Sept. 21, 2016 at par plus accrued distributions. Dividends are payable on the 15th day of January, April, July and October.

Upon the occurrence of a change of control, holders can convert some or all of their preferred shares into a number of common shares equal to the lesser of the sum of $25.00 plus accrued interest divided by the common share price and 3.4483.

Merrill Lynch, Pierce, Fenner & Smith Inc., Raymond James & Associates, Inc. and Wells Fargo Securities LLC are the bookrunners.

The senior co-managers are Citigroup Global Markets Inc. and RBC Capital Markets LLC.

The co-managers are Robert W. Baird & Co. Inc., Janney Montgomery Scott LLC, Morgan Keegan & Co., Inc. and Stifel Nicolaus & Co., Inc.

Proceeds will be contributed to the company's operating partnership, Pebblebrook Hotel, LP, and about $42 million will be used to repay the debt outstanding on the company's senior unsecured credit facility. Any balance will be used for general corporate purposes, which may include acquiring and investing in hotel properties, reducing debt and repurchasing outstanding common shares.

The hotel investment company is based in Bethesda, Md.

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