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Ashford Moves to Enhance Liquidity Position

DALLAS-The hospitality REIT pays down and restructures some debt as well as suspending the company's stock dividend.

By Don Jergler | Updated on December 29, 2008

DALLAS-Ashford Hospitality Trust Inc. offered an update on its liquidity position, and revealed actions to manage the sources and uses of the company’s funds to “conservatively navigate through challenging market conditions.”

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.

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