Braemar Hotels and Resorts Inc. (NASDAQ: BHR) stock increases by 2.15% in the current market trading. Braemar Hotels & Resorts is led by five guiding values that they feel best to represent who they are: ethical, creative, profitable, entertaining, and tenacious. BHR’s plan is to invest mainly in full-service premium hotels and resorts that are expected to achieve RevPAR that is at least double that of the existing U.S. average RevPAR for all hotels, according to Smith Travel Research.
What is happening?
BHR recently revealed the pricing of its $75 million private placement of 4.5 percent Convertible Senior Notes due 2026 with an aggregate principal amount of $75 million (the “Notes”). The original purchaser of the Notes has been given a 13-day option to buy up to an additional $11.25 million in gross principal value of the Notes from Braemar. Braemar plans to complete the selling of the Notes on or around May 18, 2021, if all normal closing requirements are met.
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Interest on the Notes would be paid semi-annually at a rate of 4.5 percent per year. The Notes will expire on June 1, 2026, whether they are converted, redeemed, or repurchased before then. The Notes would be Braemar’s senior unsecured liabilities, convertible for cash, BHR’s common stock, or a mix of cash and BHR’s common stock at Braemar’s discretion. The Notes would have an initial exchange rate of 157.7909 shares of BHR common stock per $1,000 principal sum of Notes, at an initial conversion price of approximately $6.34 per share of BHR common stock. The original conversion rate and price are subject to change under some circumstances.
Furthermore,
Braemar plans to use the gross proceeds of the sale for general corporate purposes, such as repaying a portion of its obligations, including sums owed under its revolving term loan, as well as capital spending and future acquisitions.
