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AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC. FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

August 29, 2014



Item 1.01. Entry into a Material Definitive Agreement.

The information set forth under Item 2.03 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 1.01.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Amendment of Barcelo Promissory Notes to Provide Additional Flexibility in connection with the Closing of the Equity Inns Portfolio Acquisition

On August 25, 2014, American Realty Capital Hospitality Operating Partnership, L.P. (the "OP" and together with American Realty Capital Hospitality Trust, Inc., the "Company") entered into a First Amendment to Promissory Notes (the "Amendment") with Barcelo Crestline Corporation ("BCC") to amend certain terms of (a) the $58,074,056.52 promissory note (the "First Note") and (b) the $5,000,000 promissory note (the "Second Note" and together with the First Note, the "Notes") each of which were executed by the OP in favor of BCC on March 21, 2014. Pursuant to the Amendment, the OP and BCC agreed to (1) pool the promissory notes into one combined note (the "Note") with an outstanding principal amount of $63,074,056.52 to be governed by the terms set forth in the First Note; (2) amend the maturity date such that the Note will be due and payable (the "Maturity Date") within ten business days after the date the Company raises $70.0 million in common equity excluding any common equity raised on or prior to the closing of the acquisition of the portfolio of 126 hotels pursuant to the Real Estate Sale Agreement, dated as of May 23, 2014 (the "Equity Inns Closing"); and (3) change the payment date of the $3,000,000 payment by the OP to BCC originally due on March 21, 2015 and the $500,000 payment by the OP to BCC originally due on March 21, 2016 (collectively, the "Payments") to the Maturity Date. Prior to the Amendment, the maturity date of the Notes was within ten business days after the date the Company raised $150.0 million in common equity without regard for the timing of the Equity Inns Closing. The Company believes the Amendment will provide it with greater flexibility to complete the Equity Inns Closing.

If the Equity Inns Closing does not occur prior to 11:59 PM EDT on March 31, 2015 the Amendment shall become null and void, the OP and BCC shall become bound by the original terms of the Notes and the payment dates of the Payments will revert back to March 21, 2015 and March 21, 2016, respectively.

The foregoing description of the Amendment is a summary and is qualified in its entirety by the terms thereof. The Company will file the Amendment with the Securities and Exchange Commission as an exhibit to its next Quarterly Report on Form 10-Q.


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Source: Edgar Glimpses


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