Ashford has roughly $200 million of unrestricted cash on hand, with $100 million invested in US Treasuries, the company said in a prepared statement. Those amounts recently were reduced by roughly $50 million to partially pay down the company's credit facility, and the company has approximately $29 million of hard debt maturities in 2009 for which it is already seeking a negotiated extension, and $75 million of hard debt maturities in 2010, the company says in a prepared release.

According to the company, these loans currently have better than two times debt service coverage. In March the company swapped $1.8 billion of fixed-rate debt to floating-rate debt at a spread of 264-basis points over LIBOR with a view that interest rates would decline if RevPAR decelerated to enhance interest coverage due to a slowing economy.

Portions of the debt provided a LIBOR cap of 3.75% and a LIBOR floor of 1.25%. In early December, the company bought down the LIBOR floor to 0.75% through December, 2009 to capitalize on LIBOR's decline.

At the time of the swap transaction, the weighted average interest rate on Ashford's debt was 5.55%. Based on the recent 30-day LIBOR rate of 0.47%, the average interest rate on Ashford's debt, of which approximately 95% is now floating rate is 3.24%. The combined benefits of the swap and the lower current LIBOR may provide interest savings of $65 million on an annualized basis.

"The challenges facing the lodging industry today are virtually unprecedented. In this environment, we have aggressively enhanced our liquidity and implemented capital market strategies ahead of the downturn to mitigate the impact," Monty J. Bennett, Ashford's president and CEO, says in a prepared statement. "Certain fundamental features of our company position us better to withstand these challenging markets…we continue to execute aggressive cost saving measures at the property level that include payroll freezes, vendor contract renegotiations and adjustments to service levels. In addition, corporate level cost containment plans have been implemented which include reductions in overhead from staff layoffs, salary freezes, and reduced benefits and fees along with other cost saving measures."

Ashford has negotiated an amendment with the 11 banks in its $300 million credit facility. The main provision changes to the facility, which expires in 2012 after extensions, include: Reducing the fixed charge coverage ratio to 1.25 times effective immediately until March 31, 2011, at which time the ratio steps up to 1.35 times; reducing the revolver commitment level from $300 million to $250 million; reducing the maximum leverage ratio from 75% to 65%; adjusting the grid pricing upward to a spread of 275-basis points to 350-basis points; suspending the dividend to the minimum REIT requirements through 2009.

Effective with the fourth quarter ending Dec. 31 the board of directors suspended the company's common stock dividend. The company expects to distribute the minimum dividend required to maintain its REIT status in 2009, which is likely to be assessed, if necessary, in the fourth quarter of 2009.

With the removal of the common dividend, the company will pay the base rate for the company's Series B convertible preferred stock at 14 cents per share for the fourth quarter. Calls were not returned to GlobeSt.com by deadline.

Ashford is a self-administered REIT focused on investing in the hospitality industry across all segments and at all levels of the capital structure, including direct hotel investments, first mortgages, mezzanine loans and sale-leaseback transactions.