Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
As previously disclosed, on August 1, 2019, Host Hotels & Resorts, L.P. ("Host
L.P."), of which Host Hotels & Resorts, Inc. ("Host Inc.") is the sole general
partner and of which it holds approximately 99% of the partnership interests in
Host L.P., entered into the fifth amended and restated senior revolving credit
and term loan facility (the "Credit Facility"), with Bank of America, N.A., as
administrative agent, JPMorgan Chase Bank, N.A and Wells Fargo Bank, N.A. as
co-syndication agents, and certain other agents and lenders. The Credit Facility
allows for revolver borrowings in an aggregate principal amount of up to $1.5
billion. The Credit Facility also provides for a term loan facility of $1
billion (which is fully utilized). The material terms of the Credit Facility are
described under Item 2.03 of Host Inc.'s and Host L.P.'s Current Report on Form
8-K filed with the Securities and Exchange Commission (the "SEC") on August 6,
2019, which description is incorporated by reference herein.
As of December 31, 2019, Host L.P. had $1.5 billion of availability under the
revolver portion of its Credit Facility. On March 16, 2020, Host L.P. provided
notice to the lenders to borrow the entire available amount under the revolver
portion of its Credit Facility so that a total of $1.5 billion is currently
outstanding. The current interest rate for borrowings under the revolving
portion of the Credit Facility is LIBOR plus 90 basis points based on Host
L.P.'s current unsecured long-term debt rating.
Host L.P. increased its borrowings under the revolver portion of the Credit
Facility as a precautionary measure in order to increase its cash position and
preserve financial flexibility in light of current uncertainty in the global
markets resulting from the global coronavirus (COVID-19) outbreak. The proceeds
from the borrowings under the revolver portion of the Credit Facility are
currently being held on Host L.P.'s balance sheet, resulting in total cash and
cash equivalents of approximately $2.8 billion as of March 20, 2020. In
accordance with the terms of the Credit Facility, the proceeds from the
borrowings under the revolver portion of the Credit Facility may be used for
working capital, general corporate or other purposes.
Jim Risoleo, President and Chief Executive Officer, said, "Out of an abundance
of caution, we have drawn $1.5 billion under the revolver portion of our Credit
Facility providing Host with a total of approximately $2.8 billion of cash as of
the date of this 8-K filing. We continue to maximize our financial flexibility
as the duration and magnitude of the impact of COVID-19 on global travel demand
remain uncertain. We are pleased to have executed a prudent and disciplined
capital allocation strategy that prioritized creating significant balance sheet
capacity and liquidity in recent years and expect our judicious capital
allocation decisions to benefit all our stakeholders in the long-term."
Mr. Risoleo continued, "Our world-class operators, including Marriott, Hyatt and
Hilton, have coordinated with us to develop detailed cost-cutting contingency
plans to eliminate unnecessary costs at each of our hotels. These plans are
tailored to address the specific operational needs of each property and are
expected to significantly reduce Host's operating costs through this period of
uncertainty."
Item 7.01 Regulation FD Disclosure
On March 20, 2020, Host Inc. posted to its website (www.hosthotels.com) a slide
presentation entitled "Additional Investor Information" which contains
information relating to the Company's liquidity and financial covenants relating
to its Credit Facility and senior notes. A copy of the presentation is furnished
as Exhibit 99.1 to this report.
The information contained in this Current Report shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as shall be expressly set
forth by specific reference in such a filing.
Forward-Looking Statements
In this Current Report on Form 8-K, we make forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are identified by their use of terms and phrases such
as "anticipate," "believe," "could," "expect," "may," "intend," "predict,"
"project," "plan," "will," "estimate" and other similar terms and phrases.
Forward-looking statements are based on management's current expectations and
assumptions and are not guarantees of future performance. Forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause our actual results to differ materially from those anticipated
at the time the forward-looking statements are made, including the potential
impact of COVID-19. These risks and uncertainties include risks and
uncertainties associated with our business described in our Annual Report on
Form 10-K for the year ended December 31, 2019, and in other filings with the
SEC. Although we believe the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, we can give no assurance that
we will attain these expectations or that any deviations will not be material.
Except as otherwise required by the federal securities laws, we disclaim any
obligations or undertaking to publicly release updates to any forward-looking
statement contained in this report to conform the statement to actual results or
changes in our expectations.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No. Description
99.1 Additional Investor Information Slide Presentation, Dated March 20, 2020
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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