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Item 1.01.
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Entry into a Material Definitive Agreement.
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First Amendment to $600.0 Million Senior Credit Facility
On May 7, 2020, Summit Hotel OP, LP (the
“Operating Partnership”), as borrower, Summit Hotel Properties, Inc. (the “Company”), as parent guarantor,
and each party executing the credit facility documentation as a subsidiary guarantor, entered into the First Amendment to Credit
Agreement (the “First Amendment”) of the Operating Partnership’s $600 Million senior credit facility (the “Credit
Facility”) with Deutsche Bank AG New York Branch, as administrative agent, and a syndicate of lenders including Deutsche
Bank AG New York Branch, Bank of America, N.A., Regions Bank, U.S. Bank National Association, KeyBank National Association, PNC
Bank, National Association, Royal Bank of Canada, Raymond James Bank, N.A., Compass Bank, Branch Banking and Trust Company, Capital
One, National Association and BMO Harris Bank N.A.
The following summary of the First Amendment
is qualified in its entirety by reference to the First Amendment to Credit Agreement, dated May 7, 2020, a copy of which is attached
hereto as Exhibit 10.1 and incorporated by reference herein. The following is a summary of the material amendments to the Credit
Agreement:
Certain financial and other covenants under
the Credit Facility were waived or adjusted, for the periods described below:
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Temporary waivers of all financial and certain other covenants in the Credit Facility for the period April 1, 2020 through
March 31, 2021;
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Adjustments to certain financial covenants for the period April 1, 2021 through December 31, 2021 including:
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Increases in the Maximum Leverage Ratio, adjusting down each quarter of 2021;
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Reduction of the Minimum Consolidated Fixed Charge Coverage Ratio;
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Increase of the Maximum Unsecured Leverage Ratio; and
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Reduction of the Minimum Unsecured Interest Coverage Ratio;
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Increases to the Maximum Leverage Ratio for the calendar year 2022, adjusting down throughout 2022.
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The interest rate during the periods of
the financial and covenant waivers and adjustments will be set at Pricing Level VII, as defined in the Credit Facility documents.
The First Amendment requires the Borrower
and certain subsidiaries to pledge to the secured parties all of the equity interests in the entities that own all properties included
in the unencumbered asset pool supporting the facility (“Unencumbered Properties”), as well as the equity interests
in the TRS lessees related to such Unencumbered Properties until the Borrower meets certain conditions for their release.
The First Amendment confirmed that the Borrower
may advance up to an additional $100 million on the existing revolving facility. Furthermore, the First Amendment permits the Borrower
to advance an additional $50 million, in addition to the $100 million advance described in the preceding sentence, upon filing
mortgages and related security agreements on all Unencumbered Properties, with such security documents to be released upon the
Borrower meeting certain conditions for their release.
Certain other typical limitations and conditions
for credit facilities of this nature were included among the provisions in the First Amendment including, among other provisions,
limitations on the use of revolving facility advances, certain restrictions on payments of dividends and establishment of a minimum
liquidity requirement.
We retain the right to opt out of the additional
restrictive covenants and have all equity pledges, mortgages and security agreements released upon demonstration of compliance
with the existing financial covenants.
Third Amendment to $225.0 Million 2018
Term Loan
On May 7, 2020, the Operating Partnership,
as borrower, the Company, as parent guarantor, and each party executing the credit facility documentation as a subsidiary guarantor,
entered into the Third Amendment to the First Amended and Restated Credit Agreement (the “Third Amendment”) of the
Operating Partnership’s $225 Million 2018 term loan (the “2018 Term Loan”) with KeyBank National Association,
as administrative agent, and a syndicate of lenders including KeyBank National Association, Regions Bank, Raymond James Bank, N.A.,
Branch Banking and Trust Company, Capital One, National Association, PNC Bank, National Association, American Bank, N.A., and U.S.
Bank National Association.
The amendments to the 2018 Term Loan made
pursuant to the Third Amendment are substantially similar to the amendments described above concerning the Company’s $600
Senior Credit Facility. The summary of the Third Amendment is qualified in its entirety by reference to the Third Amendment to
First Amended and Restated Credit Agreement, dated May 7, 2020, a copy of which is attached hereto as Exhibit 10.2 and incorporated
by reference herein.
Second Amendment to $225.0 Million 2017 Term Loan
On May 7, 2020, the Operating Partnership,
as borrower, the Company, as parent guarantor, and each party executing the credit facility documentation as a subsidiary guarantor,
entered into the Second Amendment to the Credit Agreement (the “Second Amendment”) of the Operating Partnership’s
$225 Million 2017 term loan (the “2017 Term Loan”) with KeyBank National Association, as administrative agent, and
a syndicate of lenders including KeyBank National Association, Deutsche Bank AG New York Branch, Bank of America, N.A., Regions
Bank, Raymond James Bank, N.A., Branch Banking and Trust Company, Capital One, National Association, PNC Bank, National Association,
Royal Bank of Canada, and U.S. Bank National Association.
The amendments to the 2017 Term Loan made
pursuant to the Second Amendment are substantially similar to the amendments described above concerning the Company’s $600
Senior Credit Facility. The summary of the Second Amendment is qualified in its entirety by reference to the Second Amendment to
Credit Agreement, dated May 7, 2020, a copy of which is attached hereto as Exhibit 10.3 and incorporated by reference herein.