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Hersha Hospitality Trust Announces Commitment for $225 Million Senior Secured Credit Facility

^{Published on 2010-10-05 18:40:44 - Market Wire}
 

PHILADELPHIA--([ BUSINESS WIRE ])--Hersha Hospitality Trust (NYSE: HT), owner of select service and upscale hotels in major metropolitan markets, today announced that it has signed a commitment letter with TD Bank, N.A. and TD Securities (USA) LLC for a proposed $225 million senior secured revolving credit facility, which would replace Hershaa™s current $135 million senior secured credit facility. TD Bank will serve as the sole administrative agent and TD Securities (USA) LLC will serve as lead arranger and book manager.

"This secured line of credit will help us continue to execute on our strategy of acquiring high-quality hotel properties in key urban gateway markets, which in our experience have historically led economic recoveries."

The proposed $225 million senior secured revolving credit facility matures in three years with an extension option for an additional year and may be upsized to $250 million. Borrowings will bear interest at a rate determined by a leverage-based pricing grid. LIBOR loans will bear interest at LIBOR plus an applicable margin of either 350 or 375 basis points per year, subject to a LIBOR floor of 75 basis points per year. Hersha expects that other terms, conditions and covenants of the new credit facility will be generally consistent with the terms of its existing credit facility.

aWe appreciate the support of TD Bank, TD Securities and the banking syndicate involved in the facility. We believe the ability to materially increase our financial flexibility with this increased revolving credit facility is testament to the progress we have made over the years to position our portfolio in some of the strongest lodging markets in the country and to the increased cash flow our hotels are able to generate,a commented Jay H. Shah, Hershaa™s Chief Executive Officer. aThis secured line of credit will help us continue to execute on our strategy of acquiring high-quality hotel properties in key urban gateway markets, which in our experience have historically led economic recoveries.a

The Company expects to close on the revolving credit facility during the fourth quarter of 2010, subject to satisfaction of customary closing conditions and the negotiation and execution of definitive loan documents.

About Hersha Hospitality Trust

Hersha Hospitality Trust is a self-advised real estate investment trust, which owns interests in 76 hotels, totaling 10,071 rooms, primarily along the Northeast Corridor from Boston to Washington D.C. Hersha also owns hotels in Northern California and Scottsdale, Arizona. Hersha focuses on upscale, mid-scale and extended stay hotels in major metropolitan markets.

Forward Looking Statement

Certain matters within this press release are discussed using aforward-looking statementsa within the meaning of the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. For a description of these factors, please review the information under the heading aRisk Factorsa in Hersha Hospitality Trusta™s filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2009.