The REIT plans to use some of
the money to pay off a mortgage
secured by the JW Marriott.

WASHINGTON, DC-Host Hotels & Resorts priced its private placement and expects to realize net proceeds of some $344 million. The REIT plans to use some of this to pay off a mortgage secured by the JW Marriott in Washington, DC. 

The $350 million offering, which is expected to close on March 22, 2012, is for senior notes due 2022.  It will use some of this to repay the $113 million principal amount outstanding on a 7.5% mortgage secured by the downtown hotel. It will also redeem $250 million of its 6 7/8% Series S senior notes due in 2014.

Host, like most REITs, is carefully balancing a strategy of acquisitions against capital raising and balance sheet delevering, with this offering the latest example.  Last November the REIT closed a new $1 billion revolving credit facility, for a $400 million increase over its existing facility, via a syndicate of banks. 

The existing credit facility was scheduled to mature in September of 2012.  Larry K. Harvey, executive vice president and chief financial officer, noted in a prepared statement that over the last three years, the REIT has been working hard to expand its banking relationships.  “Those efforts paid off as we significantly enhanced the size of the facility by increasing the number of participating banks from 10 to 14,” he said.

That loan facility followed another private placement, of $300 million. Those senior notes are due in 2021.