ASHFORD HOSPITALITY TRUST,INC. (NYSE:AHT) Files An 8-K Material Modification to Rights of Security Holders

ME Staff 8-k
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ASHFORD HOSPITALITY TRUST,INC. (NYSE:AHT) Files An 8-K Material Modification to Rights of Security Holders
Item 3.03.Material Modification to Rights of Security Holders.

On November8, 2017, Ashford Hospitality Trust,Inc., a Maryland corporation (the “Company”) agreed to issue 5,400,000 shares of the Company’s newly created 7.50% SeriesI Cumulative Preferred Stock (the “SeriesI Preferred Stock”) and all or any part of the 810,000 shares of SeriesI Preferred Stock subject to the Over-Allotment Option (as defined below) of the Underwriters (as defined below). As set forth in Articles Supplementary Establishing and Fixing the Rights and Preferences of a Seriesof Preferred Stock (the “Articles Supplementary”), filed with the Maryland State Department of Assessments and Taxation on November14, 2017, the SeriesI Preferred Stock ranks: (i)senior to all classes or series of the Company’s common stock and future junior securities; (ii)on a parity with each series of the Company’s outstanding preferred stock (the 8.45% SeriesD Cumulative Preferred Stock (the “SeriesD Preferred Stock”), 7.375% SeriesF Cumulative Preferred Stock, 7.375% SeriesG Cumulative Preferred Stock and the 7.50% SeriesH Cumulative Preferred Stock), and with any future parity securities and (iii)junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs.

The Company will pay cumulative dividends on the SeriesI Preferred Stock in the amount of $1.875 per share each year, which is equivalent to 7.50% of the $25.00 liquidation preference per share of SeriesI Preferred Stock. Dividends on the SeriesI Preferred Stock are payable quarterly in arrears on the 15th day of January, April, Julyand Octoberof each year (or, if not on a business day, on the next succeeding business day). The first dividend on the SeriesI Preferred Stock sold in this offering will be paid on January16, 2018 and will be in the amount of $0.229167 per share.

On and after November17, 2022, the Company may, at its option, redeem the SeriesI Preferred Stock, in whole or in part, by paying $25.00 per share, plus all accrued and unpaid dividends to, but not including, the date of redemption. Except with respect to the special optional redemption described below, and in certain limited circumstances relating to the ownership limitation necessary to preserve the Company’s qualification as a REIT, the SeriesI Preferred Stock will not be redeemable prior to November17, 2022. Upon the occurrence of a Change of Control (as defined below), the Company may, at its option, redeem the SeriesI Preferred Stock, in whole or in part within 120 days after the first date on which such Change of Control occurred, by paying $25.00 per share, plus any accrued and unpaid dividends to, but not including, the date of redemption. If, prior to the Change of Control Conversion Date (as defined below), the Company has provided or provides notice of redemption with respect to the SeriesI Preferred Stock (whether to the Company’s optional redemption right or the Company’s special optional redemption right), the holders of SeriesI Preferred Stock will not have the conversion right described below.

A “Change of Control” is when, after the original issuance of the SeriesI Preferred Stock, the following have occurred and are continuing:

subject, in each case, to provisions for the receipt of alternative consideration.

If, prior to the Change of Control Conversion Date, the Company has provided or provides notice of redemption with respect to the SeriesI Preferred Stock, whether to the Company’s optional redemption right or the Company’s special optional redemption right, the holders of SeriesI Preferred Stock will not have any right to convert the SeriesI Preferred Stock in connection with the Change of Control Conversion Right (as defined below), and any shares of SeriesI Preferred Stock subsequently selected for redemption that have been tendered for conversion will be redeemed on the related date of redemption instead of converted on the Change of Control Conversion Date. Except as provided above in connection with a Change of Control, the SeriesI Preferred Stock is not convertible into or exchangeable for any other securities or property.

The “Change of Control Conversion Right” is the right of each holder of SeriesI Preferred Stock to convert some or all of the SeriesI Preferred Stock held by such holder upon the occurrence of a Change of Control.

The “Change of Control Conversion Date” is the date the SeriesI Preferred Stock is to be converted, which will be a business day that is no fewer than 20 days nor more than 35 days after the date on which the Company provides the notice described above to the holders of SeriesI Preferred Stock.

The “Common Stock Price” will be: (i)the amount of cash consideration per share of the Company’s common stock, if the consideration to be received in the Change of Control by the holders of the Company’s common stock is solely cash; or (ii)the average of the closing prices for the Company’s common stock on the NYSE for the ten consecutive trading days immediately preceding, but not including, the effective date of the Change of Control, if the consideration to be received in the Change of Control by the holders of the Company’s common stock is other than solely cash.

The description of the SeriesI Preferred Stock in this report does not purport to be complete and is qualified in its entirety by reference to the full text of the Articles Supplementary, which is filed as Exhibit3.1 hereto and is incorporated herein by reference.

Item 5.03.Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On November13, 2017, the Company executed the Articles Supplementary for the purpose of establishing the terms of the SeriesI Preferred Stock and classifying and designating 6,210,000 shares of authorized, but unissued, preferred stock as SeriesI Preferred Stock. The information about the Articles Supplementary contained under Item 3.03 of this Current Report on Form8-K, including the summary description of the rights and preferences of the SeriesI Preferred Stock, is incorporated into this Item 5.03 by reference.

The description of the Articles Supplementary contained in this Item 5.03 is qualified in its entirety by reference to the full text of the Articles Supplementary, which is filed as Exhibit3.1 hereto and is incorporated by reference herein.

Item 8.01 Other Events.

On November8, 2017, the Company, Ashford Hospitality Limited Partnership, a Delaware limited partnership, and Ashford Hospitality Advisors LLC, a Delaware limited liability company, entered into an underwriting agreement (the “Underwriting Agreement”) with Morgan Stanley& Co. LLC and UBS Securities LLC, as representatives of each of the underwriters listed on Schedule I thereto (collectively, the “Underwriters”), to which the Company agreed to sell 5,400,000 shares of the Company’s SeriesI Preferred Stock (the “Firm Shares”) at a price to the public of $25.00 per share of SeriesI Preferred Stock. to the Underwriting Agreement, the Company granted the Underwriters an option (the “Over-Allotment Option”), which expires 30 days after the date of the Underwriting Agreement, to purchase up to an additional 810,000 shares of SeriesI Preferred Stock on the same terms and conditions as the Firm Shares. Closing of the issuance and sale of the SeriesI Preferred Stock is scheduled for November17, 2017. The Company will receive net proceeds from the offering of approximately $130.4 million, after deducting underwriting discounts, advisory fees and commissions and estimated offering expenses payable by the Company. The Company expects to use the net proceeds for general corporate purposes, which may include but are not limited to: the redemption, in part, of its SeriesD Preferred Stock; the acquisition of additional properties or hospitality-related investments, as suitable opportunities arise; capital expenditures; and/or the repayment of outstanding indebtedness.

The offering of the SeriesI Preferred Stock has been registered under the Securities Act of 1933, as amended (the “Securities Act”), to an effective registration statement on FormS-3 (Registration No.333-220459) of the Company, as amended, and a prospectus supplement dated November8, 2017, filed with the Securities and Exchange Commission to Rule424(b)under the Securities Act.

The Underwriting Agreement provides that the obligations of the Underwriters to purchase the SeriesI Preferred Stock are subject to approval of certain legal matters by counsel to the Underwriters and other customary conditions. The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the Underwriters may be required to make because of any of the those liabilities.

The description of the Underwriting Agreement contained in this Item 8.01 does not purport to be complete is qualified in its entirety by reference to the full text of the Underwriting Agreement, which is filed as Exhibit1.1 hereto and is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

ExhibitNumber

Description

1.1

Underwriting Agreement, dated November8, 2017, among Ashford Hospitality Trust,Inc., Ashford Hospitality Limited Partnership, Ashford Hospitality Advisors LLC, Morgan Stanley& Co. LLC and UBS Securities LLC, and each of the underwriters listed on Schedule I thereto.

3.1

Articles Supplementary Establishing and Fixing the Rights and Preferences of a Seriesof Preferred Stock, accepted for record and certified by the Maryland State Department of Assessments and Taxation on November14, 2017.


ASHFORD HOSPITALITY TRUST INC Exhibit
EX-1.1 2 a17-27110_1ex1d1.htm EX-1.1 Exhibit 1.1   EXECUTION VERSION   ASHFORD HOSPITALITY TRUST,…
To view the full exhibit click here

About ASHFORD HOSPITALITY TRUST,INC. (NYSE:AHT)

Ashford Hospitality Trust, Inc. (Ashford), together with its subsidiaries, is an externally advised real estate investment trust (REIT). The Company operates through direct hotel investments segment. It is focused on investing in the hospitality industry with a focus on full-service upscale and upper-upscale hotels in the United States. The Company owns its lodging investments and conducts its business through Ashford Hospitality Limited Partnership, its operating partnership. Its hotels are operated under the brands of Hilton, Hyatt, Marriott, Starwood and Intercontinental Hotels Group. The Company’s hotels portfolio is asset-managed by Ashford LLC. The Company is focused on direct hotel investments and it may invest in a range of lodging-related assets. Its investments may include direct hotel investments; mezzanine financing through origination or acquisition; first-lien mortgage financing through origination or acquisition, and sale-leaseback transactions.