Summit Hotel inks ‘at the market’ agreement to sell $125 million 6.45% preferreds, common stock

By Stephanie N. Rotondo

Seattle, Aug. 2 – Summit Hotel Properties announced an “at the market” offering of up to $125 million of its 6.45% series D cumulative redeemable preferred stock (NYSE: INNPD) and common stock in a press release on Tuesday.

Robert W. Baird & Co. Inc., BofA Merrill Lynch, Canaccord Genuity Inc., Deutsche Bank Securities Inc., Jefferies LLC, KeyBanc Capital Markets Inc., Raymond James & Associates Inc. and RBC Capital Markets LLC are acting as the sales agents.

Under the agreement, the sales agents will not sell the preferreds at a price per share higher than $27.50 through Dec. 27. From that date until June 28, 2020, the maximum price is par plus accrued dividends plus the number of years until the optional redemption date multiplied by 0.0050.

From June 29, 2020 on, the maximum price is par plus accrued dividends.

The Austin, Texas-based real estate investment trust originally sold $75 million of 6.45% preferreds on June 21.

Dividends are payable on the last day of February, May, August and November, beginning Aug. 31. The preferreds become redeemable on or after June 28, 2021 at par plus accrued dividends.

The securities can also be redeemed upon a change of control and subsequent delisting event in whole at par plus accrued dividends.

Upon a change of control, holders will also have an option to convert their preferred shares into common stock.

All proceeds from the offering will be contributed to the operating partnership, which will use the funds for general corporate purposes.

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