BETHESDA, Md., Nov. 17, 2015 — Host Hotels & Resorts, Inc. (NYSE:HST) today provided an update on its ongoing, value-enhancing strategic transactions and share repurchases.
“We are making solid progress on our strategic initiatives to create value, as underscored by our latest asset divestitures, financing activity and aggressive stock repurchases,” said W. Edward Walter, President and Chief Executive Officer. “We are opportunistically taking advantage of value-enhancing opportunities and market conditions, and remain confident in our strategic plan and future prospects. Host Hotels is taking the right steps to support continued strong operating performance, drive continued growth and generate superior returns for stockholders.”
On November 12, 2015, the Company sold the 273-room Novotel Queenstown for NZ$91.3 million ($59.7 million), including the FF&E reserve, continuing the strategic initiative of selling assets in Asia in order to wind down the Company’s business in the region. The Company expects proceeds of the sale to be used to repay the property’s existing NZ$30 million mortgage loan and for general corporate purposes, including funding the stock repurchase program.
As of November 16, 2015, the Company has bought back $110 million of its common stock since its earnings call on October 29, 2015, for an average price of $17.15 per share. This exhausts the first $500 million share repurchase program and begins purchases under the second $500 million share repurchase program, which has remaining capacity of $490 million.
Since the Company’s last earnings release, the European joint venture closed on the refinancing of two mortgage loans. On November 11, 2015, the Westin Palace Madrid loan was increased by €5.9 million to €120 million while the initial effective interest rate was reduced by 185 basis points to 2.15%. On November 12, 2015, the Le Meridien Piccadilly loan was increased by £1.6 million to £40 million with an elimination of principal amortization and an initial effective interest rate reduction of 100 basis points to 2.97%. In addition to these transactions, the European joint venture is planning to complete a third loan refinancing by the end of November, which is expected to result in further interest savings. In aggregate, these three transactions are expected to save approximately €10 million in annual debt service for the European joint venture and extend the term of the loans until 2020.
Investor Presentation
The Company has posted a comprehensive update to its investor presentation on its website at www.hosthotels.com.
This press release contains information about pending transactions, and there can be no assurance that these transactions will be completed.
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Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements include forecast results and are identified by their use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "plan," "predict," "project," "will," "continue" and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: changes in national and local economic and business conditions and other factors such as natural disasters, pandemics and weather that will affect occupancy rates at our hotels and the demand for hotel products and services; the impact of geopolitical developments outside the U.S. on lodging demand; volatility in global financial and credit markets; operating risks associated with the hotel business; risks and limitations in our operating flexibility associated with the level of our indebtedness and our ability to meet covenants in our debt agreements; risks associated with our relationships with property managers and joint venture partners; our ability to maintain our properties in a first-class manner, including meeting capital expenditure requirements; the effects of hotel renovations on our hotel occupancy and financial results; our ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; risks associated with our ability to complete acquisitions and dispositions and develop new properties and the risks that acquisitions and new developments may not perform in accordance with our expectations; our ability to continue to satisfy complex rules in order for us to remain a REIT for federal income tax purposes; risks associated with our ability to effectuate our dividend policy, including factors such as operating results and the economic outlook influencing our board's decision whether to pay further dividends at levels previously disclosed or to use available cash to make special dividends; and other risks and uncertainties associated with our business described in the Company's annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K filed with the SEC. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of November 16, 2015, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.
