ARA US Hospitality Trust : XZL 0% (ARA H-Trust) is refinancing US$270.8 million of its debt facilities at an initial public offering, of which US$10 million of revolving facilities expired in 2022 and were previously refinanced into separate loan facilities.

The stapled group’s managers said on Wednesday (Sep 27) that the trust currently has in place a US$244.3 million three-year term loan facility and a US$8.5 million four-year term loan facility maturing in 2024.

It also has a US$8 million letter of credit facility maturing next year, bringing the overall debt facilities to be refinanced to about US$260.8 million.

Under an amended facility agreement effective Sep 29, the term loan facilities will be reallocated and extended into a US$198.5 million three-year term loan facility maturing in September 2026, and a US$51 million term loan facility maturing in September 2027 respectively.

The maturity date of the existing US$8 million letter of credit facility will also be extended to September 2026.

In addition, a new US$30 million three-year revolving credit facility maturing in September 2026 will be granted.

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A mandatory pre-payment event will kick in if ARA Asset Management, who is the sponsor, ceases to own at least 51 per cent of the issued share capital in the stapled securities’ managers without the consent of the majority lenders.

There will also be a pre-payment imposed if ARA Business Trust Management ceases to be, or is removed as, the trustee manager, and a subsidiary of ARA is not appointed as the replacement manager.

Likewise, the pre-payment will be imposed if ARA Trust Management ceases to be, or is removed as, the manager of ARA US Hospitality Property Trust, and a subsidiary of ARA is not appointed as the replacement manager.

The managers estimated that the aggregate level of loan facilities and debt securities of ARA H-Trust that may be affected in this case stands at US$374.5 million, excluding interest.

Stapled securities of ARA H-Trust were trading 4.9 per cent or US$0.015 lower at US$0.29, as at 11.15 am on Wednesday, after the announcement.