REIT consolidates loans and creates near-term stability by pushing
further refinancing needs until 2028.
ALISO VIEJO, California – Sunstone Hotel Investors has
entered into a $1.35 billion Third Amended and Restated Credit Agreement to
address all near-term maturities, extend the duration of the remaining in-place
loans, and strengthen the company’s balance sheet.
The agreement
includes a $500 million revolving credit facility maturing in
September 2029, two $275 million term loan facilities maturing in
January 2029 and 2030, and a $300 million term loan facility due
January 2031.
At the lodging REIT’s election, the revolving credit
facility can be extended to September 2030 and each of the $275
million term loan facilities can be extended to January 2031. The
facilities will bear interest pursuant to a leverage-based pricing grid ranging
from 1.35% to 2.25% over the applicable term SOFR. In connection with the new
facilities, the company entered into a series of interest rate swaps to lower
its borrowing cost and better manage interest rate risk, resulting in over 75%
of its debt and preferred equity now subject to fixed rates.

This financing provides improved financial flexibility for the company to execute its strategy while continuing to pursue all avenues to maximize shareholder value.
Bryan Giglia
“We are pleased to announce the recast of our credit
facilities and appreciate the continued support from our banking partners. The
expanded facilities address all maturities through 2028, extend our average
maturity by over three years, and lower our overall cost of borrowing,” said
Sunstone CEO Bryan Giglia. “Additionally, this financing provides improved
financial flexibility for the company to execute its strategy while continuing
to pursue all avenues to maximize shareholder value.”
Sunstone utilized proceeds received from the incremental
borrowing on the new term loans to consolidate its prior four term loans into
three loans and to fully repay the outstanding balance on its revolving credit
facility. In addition, the company is delaying the draw of up to $90
million under the $275 million delayed-draw term loan facility
until January 2026 and expects to use a majority of the proceeds to
repay the Series A Senior Notes at their scheduled maturity. Following this
repayment, Sunstone will not have any debt maturities until 2028.
Sunstone’s unsecured credit facilities are led jointly by
Wells Fargo Securities, LLC, BofA Securities, Inc., JPMorgan Chase Bank, N.A.,
PNC Capital Markets LLC, U.S. Bank National Association, Truist Securities,
Inc., Regions Capital Markets and The Huntington National Bank.