EXTENDED STAY AMERICA, INC. (NYSE:STAY) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement |
On March1, 2017, Extended Stay America, Inc.s (the
Corporation) controlled subsidiary ESH Hospitality, Inc.
(ESH REIT), and certain wholly-owned subsidiaries of ESH
REIT (the Guarantors), entered into the First Amendment to
Credit Agreement (the Amendment) with Deutsche Bank AG New
York Branch, as administrative agent, which amends the Credit
Agreement, dated as of August30, 2016 (the Existing Credit
Agreement and, as amended by the Amendment, the Credit
Agreement), among ESH REIT, the Guarantors, Deutsche Bank AG
New York Branch, as administrative agent and collateral agent,
and the other lenders and financial institutions from time to
time party thereto, to reduce the interest rate applicable to the
term loans outstanding under the Credit Agreement.
Prior to the Amendment, approximately $1,297million of term loans
(the Existing Term Loans) were outstanding under the
Existing Credit Agreement. to the Amendment, certain lenders
under the Existing Credit Agreement continued their Existing Term
Loans as new term loans (the New Term Loans) in an
aggregate amount, along with New Term Loans advanced by certain
new lenders, of approximately $1,297million. The proceeds of the
New Term Loans were used to refinance all of the Existing Term
Loans in their entirety.
The Amendment had the following impact on the Existing Term
Loans: (i)decrease the interest rate spread on term loans based
on LIBOR rate (as defined below) from 3.00% to 2.50%; (ii)
decrease the interest rate spread on base rate (as defined below)
term loans from 2.00% to 1.50%; (iii) remove the floor of 0.75%
on term loans based on LIBOR rate; (iv)remove the floor of 2.00%
on base rate term loans; (v)remove step-downs on interest rate
spreads for all loan types based upon ESH REITs credit rating;
and (vi)extend the 1.00% prepayment penalty for refinancings in
connection with certain repricing transactions through
September1, 2017 (prepayments made after September1, 2017 are not
subject to a prepayment penalty, other than customary breakage
costs).
Under the Credit Agreement, the rate at which New Term Loans bear
interest is equal to (i)the rate for deposits in U.S. dollars in
the London interbank offered rate for the applicable interest
period (LIBOR rate) plus 2.50%, or (ii)the alternate base
rate, which is the highest of (x)the prime lending rate, (y)the
overnight federal funds rate plus 0.50% or (z)the one-month
adjusted LIBOR rate plus 1.00% (base rate), plus, in each
case, 1.50%.
The New Term Loans will be secured by the same collateral and
guaranteed by the same guarantors as the Existing Term Loans. The
New Term Loans have the same maturity date, August30, 2023, that
applied to the Existing Term Loans. Voluntary prepayments of the
New Term Loans are permitted at any time, in minimum principal
amounts, without premium or penalty, other than a 1.00% premium
payable in connection with certain repricing transactions within
the first six months after the Amendment and customary breakage
costs. The other terms of the New Term Loans are also generally
the same as the terms of the Existing Term Loans.
The foregoing description of the Amendment does not purport to be
complete and is qualified in its entirety by reference to the
Amendment, which is filed as Exhibit 10.1 hereto and incorporated
herein by reference.
| Item2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosure set forth above under Item 1.01 with respect to
the New Term Loans is incorporated by reference into this Item
2.03.
| Item9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| 10.1 |
First Amendment to Credit Agreement, dated as of March1, 2017, by and among ESH Hospitality, Inc., the guarantors party thereto and Deutsche Bank AG New York Branch, as administrative agent. |
About EXTENDED STAY AMERICA, INC. (NYSE:STAY)
Extended Stay America, Inc. (Extended Stay) is an integrated owner/operator of company-branded hotels in North America. The Company operates in hotel operations segment. Its business operates in the extended stay lodging industry. It owns and operates approximately 630 hotels comprising over 69,400 rooms located in approximately 40 states across the United States and in Canada. It owns and operates its hotels under its core brand, Extended Stay America, which serves the mid-price extended stay segment. In addition, it owns and operates over three Extended Stay Canada hotels. It operates its hotels owned by ESH Hospitality, Inc. (ESH REIT). The hotels are operated by the Operating Lessees, subsidiaries of the Company and are managed by ESA Management LLC (ESA Management), a subsidiary of the Company. ESH Strategies, a subsidiary of the Company, owns the brands related to its business. The Company’s extended stay hotels are designed to provide lodging or apartment accommodations. EXTENDED STAY AMERICA, INC. (NYSE:STAY) Recent Trading Information
EXTENDED STAY AMERICA, INC. (NYSE:STAY) closed its last trading session 00.00 at 17.14 with 1,229,264 shares trading hands.