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Host Hotels (HST) Extends $1.5B Credit Facility Till 2022

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Host Hotels & Resorts, Inc. (HST - Free Report) announced that it will extend the maturity dates of its $1 billion senior unsecured revolver and its $500 million term loan. These two facilities were originally slated to mature in 2018 and 2017, respectively. Now, the Bethesda, MD-based lodging real estate investment trust (REIT) has extended the maturity dates for both the revolver and term loan to 2022.

This is likely to add to the financial flexibility of this company, which already enjoys a decent balance sheet and ample liquidity.

Notably, Host Hotels, engaged in the ownership, acquisition, and redevelopment of luxury and upper-upscale hotels in the U.S and abroad, reported higher-than-expected first-quarter 2017 adjusted funds from operations (FFO) per share. Results reflected growth in comparable hotel revenues and improvement in margin.

The initial interest rate of the revolver has been set at one-month Libor plus 100 basis points (bps), whereas the same for the term loan has been fixed at one-month Libor plus 110 bps. Notably, the company has a separate $500 million 2015 term loan, which is slated to mature in 2020.
 
With this extension of maturity, Host Hotels has no meaningful debt maturities till September 2020. This provides the company ample scope for deploying capital for long-term growth opportunities and at the same time carrying out redevelopment initiatives and rewarding capital to stockholders.

Shares of Host Hotels have underperformed the Zacks categorized REIT and Equity Trust – Other industry in the last six months. Shares of the company decreased 2.1%, while the industry grew 6.8%. In the last 30 days, both its second-quarter and full-year 2017 FFO per share estimates remained unchanged.



Currently, Host Hotels carries a Zacks Rank #3 (Hold).

Investors interested in the REIT space, may consider better-ranked stocks like DiamondRock Hospitality Company (DRH - Free Report) , Gaming and Leisure Properties, Inc. (GLPI - Free Report) and American Tower Corporation (AMT - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the last 30 days, DiamondRock Hospitality Company’s FFO per share for second-quarter 2017 remained unchanged at 31 cents.

In the last 30 days, Gaming and Leisure Properties’ FFO per share for second-quarter 2017 remained unchanged at 77 cents.

In the last 30 days, American Tower Corporation’s FFO per share for second-quarter 2017 remained unchanged at $1.55.

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. All EPS numbers presented in this write up represent FFO per share.

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