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.
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