Ashford Hospitality Prime to sell $28.75 million additional 5.5% convertible preferreds

By Stephanie N. Rotondo

Seattle, March 1 – Ashford Hospitality Prime Inc. plans to price a $28.75 million add-on to its 5.5% series B convertible preferred stock, the company said in a press release on Wednesday.

Concurrently, the Dallas-based real estate investment trust is also selling 5.75 million shares of its common stock.

The $25-par preferred offering has a $4.3 million over-allotment option, while the stock sale has a greenshoe of 862,500 shares.

UBS Securities LLC, Morgan Stanley & Co. LLC and FBR Capital Markets are the joint bookrunners for the preferred sale. Baird, Janney Montgomery Scott LLC, JMP Securities and William Blair & Co. are co-managers.

The securities are non-callable until June 11, 2020, at which time the company may redeem the preferred shares for a cash redemption price of $25.00 per share plus interest.

The company may mandatorily convert the shares after June 11 if the common stock exceeds 110% of the conversion price for 45 days.

In the event of a mandatory conversion, investors shall be made whole by receiving the net present value of the difference in expected cumulative quarterly dividends between the series B preferred stock and the company’s common stock from the date of the mandatory conversion to June 11, 2019, discounted at the series B preferred stock dividend rate.

Proceeds will be used for general corporate purposes, including to fund future acquisitions, which may include recently announced potential acquisitions, assuming those deals are successful.

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