- Chatham Lodging Trust (NYSE:CLDT) new amendments to its $250M revolving credit facility include a waiver of key financial covenants through Dec. 31, 2021 with testing of covenants as of March 31, 2022.
- The amendments allow for full utilization of the entire $250M credit facility and uphold the applicable margin on borrowings of LIBOR + 250 basis points if borrowings are under $200M and LIBOR + 300 bps if borrowings exceed $200M.
- CLDT must maintain minimum liquidity, whether in cash or available capacity under the credit facility.
- Allows common share dividends limited to 100% of REIT taxable income; any dividends paid would include a cash component no greater than the minimum percentage allowed under the Internal Revenue Code.
- Chatham estimates its liquidity at $146M, including cash of ~$32M, as of Sept. 30, 2020 and remaining borrowing capacity of $114M.
- Pro forma for the sale of the Residence Inn San Diego Mission Valley and the pending sale of the joint venture with Colony Capital, Chatham’s key credit ratios are enhanced. Pro forma leverage goes to 35% from 38% based on the ratio of the company’s pro forma net debt to hotel investments at cost as of Sept. 30, 2020, and Chatham’s pro forma 2019 net debt to EBITDA ratio decreases to 4.7x from 5.7x.