Zacks_Analysts' Blog : Ashford Restructures Mortgage Loan - Analyst Blog

Ashford Hospitality Trust Inc. (AHT) recently announced that it has restructured its $203.4 million mortgage loan and extended the maturity date from December 2011 to March 2014. At the closing of this deal, the company paid down the loan by $25 million to $178.4 million.

As per the terms of the deal, 85% of excess cash flow after debt service, working capital and approved capital expenditures will be used to pay down its debt balance, thereby further deleveraging its portfolio. 

The company’s strategic move includes addressing future debt maturities with successful restructuring of loan along with continued improvement in the portfolio performance through RevPAR (Revenue per Available Room) growth and gains in operating margin.

Ashford Hospitality reported third-quarter 2011 adjusted FFO (funds from operations) of 39 cents per share compared with 33 cents per share in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

At the end of the third quarter of 2011, Ashford Hospitality had cash and cash equivalents of $180.9 million.

Ashford Hospitality is a real estate investment trust, engaged in investment and management of properties in the hospitality industry.  The company invests in the real estate markets of the United States.

Ashford Hospitality currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Host Hotels & Resorts Inc. (HST) holds a Zacks #4 Rank which translates into a short-term Sell rating.