Hersha Hospitality Gets $175M Revolving Credit Line

Hersha Hospitality Trust has announced that it has entered into a $175 million revolving credit loan and security agreement with a consortium of lenders.The deal provides for a revolving line of credit is structured to allow for an increase of an additional $40 million to be arranged with new participants as well.The company expects to use the credit for working capital and general corporate purposes in addition to the purchase of hotels in the future.The interest rate is at the Prime Rate (or alternatively LIBOR plus 250 basis points)–at Hersha’s option. The group of lenders that has committed to financing the new line of credit is substantially the same group of lenders that provided the Company with its $60 million line of credit in 2006, which was subsequently upsized to $100 million and is now being replaced. Hersha anticipates it will have consolidated debt maturities in fiscal 2009 of approximately $32.5 million, which it expects to be refinanced with the existing lenders. The majority of Hersha’s remaining consolidated debt maturing in 2009 has either already been refinanced or has unilateral extensions at the Company’s option, leaving the Company with no significant debt maturities through the end of 2013. Considering the turmoil in the credit market, the company stated that it was “very pleased” to complete this refinancing at a spread over LIBOR of only 50 to 75 basis.