Sunstone Hotel Investors (SHO) Reports Decline in February RevPAR; Initiated Negotiations with its Bank Group
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Sunstone Hotel Investors (NYSE: SHO) is providing an interim update on its operations through February and its recent capital markets activity. The Company does not undertake to make updates for any subsequent developments in its business.
Preliminary Operations Update:
February total portfolio RevPAR was $99.62, down 14.8% to prior year; Quarter to date through February 28, 2009, total portfolio RevPAR was $95.61, down 12.9% to prior year.
Arthur Buser, Chief Executive Officer, stated, "We remain focused on eliminating expenses, maximizing the cash flow of each hotel, enhancing our balance sheet and maintaining a strong liquidity position. So far during the quarter we continued to strengthen our balance sheet by repurchasing $64.0 million of our debt at an average price equivalent to 47.4% of par. With a recently renovated portfolio, a significant cash balance, and no near-term debt maturities, we continue to believe Sunstone is well positioned for the current phase of the cycle."
Additionally, the Company has initiated negotiations with its bank group to restructure its credit facility. The Company is also in the process of soliciting bids for new mortgage debt on several of its unencumbered hotels. Given the challenges of the current financing market, the Company gives no assurances that either of these initiatives will be completed.
Ken Cruse, Chief Financial Officer, stated, "We repurchased Notes at a significant discount to par after considering both our liquidity maximization and our leverage reduction goals. Our credit facility and secured debt initiatives are consistent with our objective of maximizing liquidity and, if completed, we believe these transactions will meaningfully enhance our financial flexibility. "[SM]
Preliminary Operations Update:
February total portfolio RevPAR was $99.62, down 14.8% to prior year; Quarter to date through February 28, 2009, total portfolio RevPAR was $95.61, down 12.9% to prior year.
Arthur Buser, Chief Executive Officer, stated, "We remain focused on eliminating expenses, maximizing the cash flow of each hotel, enhancing our balance sheet and maintaining a strong liquidity position. So far during the quarter we continued to strengthen our balance sheet by repurchasing $64.0 million of our debt at an average price equivalent to 47.4% of par. With a recently renovated portfolio, a significant cash balance, and no near-term debt maturities, we continue to believe Sunstone is well positioned for the current phase of the cycle."
Additionally, the Company has initiated negotiations with its bank group to restructure its credit facility. The Company is also in the process of soliciting bids for new mortgage debt on several of its unencumbered hotels. Given the challenges of the current financing market, the Company gives no assurances that either of these initiatives will be completed.
Ken Cruse, Chief Financial Officer, stated, "We repurchased Notes at a significant discount to par after considering both our liquidity maximization and our leverage reduction goals. Our credit facility and secured debt initiatives are consistent with our objective of maximizing liquidity and, if completed, we believe these transactions will meaningfully enhance our financial flexibility. "[SM]
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