Pebblebrook Secures $1.75B Loan for LaSalle Merger Deal
The term loan provides funding for the merger deal as well as financing to pay off LaSalle’s current outstanding debt balances and other transaction closing costs.
BETHESDA, MD—Pebblebrook Hotel Trust, which is in the throes of a $5.2-billion merger deal with LaSalle Hotel Properties, reports it has successfully originated a $1.75-billion term loan in connection with the transaction that is expected to close by the end of this month.
The term loan provides funding for the merger deal as well as financing to pay off LaSalle’s current outstanding debt balances and other transaction closing costs.
The term loan’s terms, pricing and covenants are substantially the same as those for the company’s current outstanding term loans, Pebblebrook reports, and is allocated into five individual tranches, maturing between 2020 and 2024, each of which is pre-payable without penalty. The financing will only be funded when the company’s pending merger with LaSalle is completed, which is targeted for Nov. 30, 2018 and is subject to approvals of shareholders of both companies.
“We are incredibly appreciative of the strong support from our bank group on this significant financing effort as our company enters this transformative period,” says Raymond D. Martz, chief financial officer for Pebblebrook Hotel Trust. “We are excited to welcome several new financing partners who have joined our bank group as part of this financing effort. We are thrilled to announce that we are one step closer to finalizing our merger with LaSalle which remains on track to close on November 30.”
The term loan is led by Merrill Lynch, Pierce, Fenner & Smith Incorporated, U.S. Bank National Association and Wells Fargo Securities, each of which serve as Joint Bookrunner and Joint Lead Arranger. PNC Capital Markets LLC, BMO Capital Markets, SunTrust Robinson Humphrey, Inc., The Bank of Nova Scotia and Compass Bank serve as Joint Lead Arrangers. Bank of America, N.A. serves as the Administrative Agent; U.S. Bank National Association and Wells Fargo Bank, National Association serve as Syndication Agents; PNC Bank, National Association, Bank of Montreal, SunTrust Bank, The Bank of Nova Scotia and Compass Bank serve as Documentation Agents. Capital One, National Association; Regions Bank; Sumitomo Mitsui Banking Corporation; and TD Bank, N.A. serve as Senior Managing Agents. Branch Banking and Trust Company; Raymond James Bank, N.A.; Land Bank of Taiwan, New York Branch; Taiwan Business Bank, Ltd., New York Branch; Taiwan Cooperative Bank, Ltd., Seattle Branch; and First Commercial Bank, Ltd., Los Angeles branch are also participating in the term loan.
The $5.2-billion merger deal announced in early September resulted in the termination of a merger agreement LaSalle had at the time with the Blackstone Group