Chatham Lodging (CLDT), Cerberus Close $130M Mortgage Secured by 10 Hotels

Chatham Lodging Trust (NYSE: CLDT), announced today that the joint venture between Chatham and Cerberus Capital Management LP, which owns 64 hotels with 8,329 rooms/suites, closed on a $130 million mortgage loan secured by 10 previously unencumbered hotels comprising 1,707 rooms. Eastdil Secured, L.L.C. arranged the $130 million first mortgage and mezzanine non-recourse financing with lenders Citibank, N.A., Wells Fargo Bank, National Association and an affiliate of Starwood Property Trust, Inc. The maturity of the facilities is three years with two one-year extension options and carries an all-in interest rate of 6.9 percent.

In addition to net proceeds from the financing, additional cash generated from operations was distributed to the partners, resulting in a distribution to Chatham of approximately $13.1 million, or more than $1 per share. The $13.1 million distribution represents 35 percent of the company’s initial $37 million investment. Chatham will use part of the distribution to pay down borrowings outstanding on its senior secured credit facility.

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