PHILADELPHIA-Hotelier Hersha Hospitality Trust reports it has closed on a new $500-million senior unsecured credit facility with a group of lenders.

Officials with the locally-based upscale hotel investment firm say the credit facility is expandable to $850 million. The credit facility consists of a $250-million senior unsecured revolving line of credit and a $250-million senior unsecured term loan. The new credit facility amends and restates the company's existing $400 million senior secured revolving credit facility.

The interest rate for the revolving line of credit is based on a pricing grid with a range of 170 to 245 basis points over LIBOR, based on the company's leverage ratio. Pricing for the term loan is LIBOR plus 160 to 235 basis points also based on the company's leverage ratio. Company officials say the firm will use the new facility for general corporate purposes.

The financing was arranged by Citigroup Global Markets Inc. and Wells Fargo Securities, LLC, as joint lead arrangers and joint book running managers. Bank of America, N.A., Manufacturers and Traders Trust Company, Raymond James Bank, N.A., TD Bank, N.A., PNC Bank, National Association, and Regions Bank acted as co-documentation agents. Compass Bank, Fifth Third Bank, Santander Bank, N.A., and U.S Bank, National Association acted as senior managing agents. Other lenders under the facility included: The Provident Bank, Beneficial Mutual Savings Bank, First Commercial Bank, Goldman Sachs Bank USA, and Morgan Stanley Bank, N.A.

“We appreciate the financial community's extraordinary support in the refinancing and enhancing of our facility. The new facility affords the company greater financial flexibility, extends our debt maturities and reduces our weighted average cost of debt,” states Ashish R. Parikh, chief financial officer of Hersha Hospitality Trust. “We were particularly encouraged by the oversubscription of the facility by the bank group. The level of interest demonstrated confidence in the company's strategic direction, conservative balance sheet and the inherent value of our high quality, urban transient hotel portfolio.”

Earlier this month, Hersha Hospitality Trust announced it had closed on the purchase of the Hotel Oceana in Santa Barbara, CA for $41.7 million.

Hersha Hospitality Trust has a portfolio of 51 hotels totaling 8,120 rooms that are located in New York, Boston, Philadelphia, Washington, DC, Miami and select markets on the West Coast.