8-K
Xenia Hotels & Resorts, Inc. (XHR)
UNITED STATESSECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 14, 2020
Xenia Hotels & Resorts, Inc.
(Exact Name of Registrant as Specified in its Charter)
| Maryland | 001-36594 | 20-0141677 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
200 S. Orange Avenue, Suite 2700 Orlando, Florida 32801 (Address of Principal Executive Offices)
(407) 246-8100 (Registrant’s Telephone Number, Including Area Code)
N/A (Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| Securities registered pursuant to Section 12(b) of the Act: | ||
|---|---|---|
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| Common Stock | XHR | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | ☐ |
|---|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On October 14, 2020, Xenia Hotels & Resorts, Inc. (the “Company”) issued a press release announcing preliminary financial and operating results for the quarter ended September 30, 2020. The full text of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure
The information set forth in Item 2.02 of this Form 8-K is incorporated by reference in this Item 7.01.
The information furnished pursuant to Items 2.02 and 7.01 of this Form 8-K, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as set forth by specific reference in such filing.
Item 8.01. Other Events
On October 14, 2020, the Company issued a press release announcing the commencement of a proposed private offering of $150.0 million aggregate principal amount of its 6.375% senior secured notes due 2025. The full text of the press release is filed as Exhibit 99.2 to this Form 8-K and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release of Xenia Hotels & Resorts, Inc., dated as of October 14, 2020 (furnished pursuant to Item 2.02) |
| 99.2 | Press Release of Xenia Hotels & Resorts, Inc., dated October 14, 2020 (filed pursuant to Item 8.01) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Xenia Hotels & Resorts, Inc. | |||
|---|---|---|---|
| Date: October 14, 2020 | By: | /s/ Taylor C. Kessel | |
| Name: | Taylor C. Kessel | ||
| Title: | Senior Vice President - General Counsel and Secretary |
Document
FOR IMMEDIATE RELEASE
DATE: October 14, 2020
XENIA HOTELS & RESORTS PROVIDES BUSINESS UPDATE
Orlando, FL - October 14, 2020 - Xenia Hotels & Resorts, Inc. (NYSE: XHR) (“Xenia” or the “Company”) today provided an update on its recently amended credit facilities, hotel operations, and liquidity.
Corporate Credit Facility Amendments
On October 14, 2020, the Company entered into further amendments on the Company's corporate credit facilities (the "October CCF Amendments"). The effectiveness of the October CCF Amendments is subject to certain conditions, including the prepayment in full of the Company's two term loans maturing in 2022 and the receipt of $95 million of net proceeds from specified transactions, which may include asset sales, debt or equity offerings, or other capital markets activity.
Key terms of the October CCF Amendments include the following:
•Increased commitments under the revolving credit facility by $23 million to $523 million through February 2022, after which the total commitments will decrease to $450 million through February 2024. This reflects a two year extension of the maturity date
•Extension of the waiver period for the testing of the financial covenants through year end 2021 and extending the modification of certain financial covenants, once quarterly testing resumes, through the first quarter of 2023
•Modification of the application of mandatory prepayments. The amendments require the Company, in the event that the revolving credit facility outstanding balance is less than $350 million, to apply 50% of net proceeds raised through various activities, including debt issuances, equity issuances, and dispositions, to repay its revolving credit facility, with the balance of the proceeds retained by the Company. If the revolving credit facility outstanding balance is greater than $350 million, there is no change to the application of mandatory prepayments
•Extension of the minimum liquidity covenant through the second quarter of 2022
Operating Update
Currently, 37 of the Company's 38 hotels and resorts are open and operating. The Company is continuing to evaluate the timing of recommencement of operations at Hyatt Regency Portland at the Oregon Convention Center.
The following table provides operating information for the Company’s portfolio during the third quarter. This information includes the days the hotels and resorts were open and operating during the periods presented, categorized by timing of recommencement of operations.
| July<br>2020 | August<br>2020 | September^(1)^<br><br>2020 | Third Quarter^(1)^<br><br>2020 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| PRELIMINARY | PRELIMINARY | |||||||||||
| 8 Hotels that Did Not Suspend Operations ^(2)^ | ||||||||||||
| Number of Hotels | 8 | 8 | 8 | 8 | ||||||||
| Number of Rooms | 1,345 | 1,345 | 1,345 | 1,345 | ||||||||
| Occupancy | 30.0 | % | 35.6 | % | 37.9 | % | 34.5 | % | ||||
| Average Daily Rate | $ | 157.14 | $ | 165.97 | $ | 170.00 | $ | 165.00 | ||||
| RevPAR | $ | 47.39 | $ | 59.07 | $ | 64.40 | $ | 56.87 | ||||
| 5 Hotels that Recommenced Operations in May | ||||||||||||
| Number of Hotels | 5 | 5 | 5 | 5 | ||||||||
| Number of Rooms | 495 | 495 | 495 | 495 | ||||||||
| Occupancy | 47.7 | % | 48.4 | % | 55.1 | % | 50.4 | % | ||||
| Average Daily Rate | $ | 203.52 | $ | 205.16 | $ | 220.86 | $ | 210.24 | ||||
| RevPAR | $ | 97.11 | $ | 99.27 | $ | 121.78 | $ | 105.88 | ||||
| 13 Hotels that Recommenced Operations in June | ||||||||||||
| Number of Hotels | 13 | 13 | 13 | 13 | ||||||||
| Number of Rooms | 5,049 | 5,049 | 5,049 | 5,049 | ||||||||
| Occupancy | 22.5 | % | 27.2 | % | 31.4 | % | 27.0 | % | ||||
| Average Daily Rate | $ | 162.03 | $ | 161.38 | $ | 155.69 | $ | 159.40 | ||||
| RevPAR | $ | 36.51 | $ | 43.90 | $ | 48.91 | $ | 43.05 | ||||
| 9 Hotels that Recommenced Operations in July | ||||||||||||
| Number of Hotels | 9 | 9 | 9 | 9 | ||||||||
| Number of Rooms | 2,455 | 2,455 | 2,455 | 2,455 | ||||||||
| Occupancy | 15.9 | % | 28.0 | % | 26.5 | % | 24.3 | % | ||||
| Average Daily Rate | $ | 193.49 | $ | 175.57 | $ | 186.54 | $ | 182.92 | ||||
| RevPAR | $ | 30.73 | $ | 49.17 | $ | 49.36 | $ | 44.53 | ||||
| All Properties Operating during Some or All of the Third Quarter ^(3)^ | ||||||||||||
| Number of Hotels | 35 | 35 | 37 | 37 | ||||||||
| Number of Rooms | 9,344 | 9,344 | 10,176 | 10,176 | ||||||||
| Occupancy | 23.9 | % | 29.7 | % | 31.6 | % | 28.5 | % | ||||
| Average Daily Rate | $ | 170.04 | $ | 169.45 | $ | 169.45 | $ | 169.60 | ||||
| RevPAR | $ | 40.61 | $ | 50.40 | $ | 53.50 | $ | 48.41 |
1.Operating information is based on preliminary estimates and is subject to change as the Company completes its quarterly closing. These preliminary estimates should not be viewed as a substitute for full interim financial statements for the third quarter prepared in accordance with GAAP. Final results for the third quarter could differ materially from these preliminary estimates. See the disclosure with respect to forward-looking statements below.
2.One hotel temporarily suspended operations from June 2, 2020 to June 15, 2020 due to property damage sustained during protests in the market.
3.Includes operating information for two properties that recommenced operations in September 2020. Also, includes operating information for Residence Inn Boston Cambridge, which was sold on October 1, 2020.
Liquidity Update
The Company applied a portion of net proceeds from its recent sale of Residence Inn Boston Cambridge to partially repay its revolving credit facility and its two term loans maturing in 2022. Proceeds from a proposed debt financing, along with cash available on the Company's balance sheet, will be applied to pay off its two term loans maturing in 2022 in full and pay off the $51 million mortgage loan secured by Marriott Dallas Downtown. As a result, the Company will have addressed all near-term debt maturities with its next debt maturity occurring in 2023.
Pro forma for the proposed debt financing and subsequent debt payoff, the Company will have approximately $450 million of liquidity inclusive of unrestricted cash and availability on its revolving credit facility. This does not include net proceeds from the sale of Marriott Napa Valley Hotel & Spa which is anticipated to close before the end of October.
Additionally, the Company has revised its estimate of average monthly recurring cash expenses to reflect the recommencement of operations at its properties as follows:
| ($ in millions) | Current Estimate Reflecting 37 Open and Operating Hotels^(1)^ |
|---|---|
| Hotel operations | $4.0 |
| Real estate taxes, personal property taxes and insurance | 5.0 |
| General and administrative expenses, cash | 1.5 |
| Monthly recurring cash expenses | $10.5 |
| Debt service | 6.0 |
| Average monthly recurring cash expenses including debt service | $16.5 |
1.Numbers are rounded. Reflects combination of actuals and accruals for certain items
About Xenia Hotels & Resorts, Inc.
Xenia Hotels & Resorts, Inc. is a self-advised and self-administered REIT that invests in uniquely positioned luxury and upper upscale hotels and resorts, with a focus on the top 25 U.S. lodging markets as well as key leisure destinations in the United States. The Company owns 38 hotels comprising 11,024 rooms across 16 states. Xenia’s hotels are in the luxury and upper upscale segments, and operated and/or licensed by industry leaders such as Marriott, Hyatt, Kimpton, Fairmont, Loews, and Hilton, as well as leading independent management companies including The Kessler Collection and Sage Hospitality. For more information on Xenia’s business, refer to the Company website at www.xeniareit.com.
This press release contains statements as to the Company's beliefs and expectations of the outcome of future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended . You can identify these statements by the fact that they do not relate strictly to historical or current facts. Examples of these statements include, but are not limited to, statements regarding the status and outcome of certain asset sale transactions, the status of suspension of operations at our hotel properties, the anticipated impact of the COVID-19 pandemic on travel, transient and group demand, the anticipated impact of such pandemic on our results of operations, and the resulting amount of cancellation and attrition fees and cost-containment efforts. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These risks and uncertainties include, but are not limited to, the effects of the COVID-19 pandemic, including on the demand for travel, transient and group business (including, but not limited to, government-imposed travel or meeting restrictions), and levels of consumer confidence in the safety of travel as a result of the pandemic; the length of the COVID-19 pandemic and severity of such pandemic in the United States; the pace of economic recovery and the recovering of consumer confidence following the COVID-19 pandemic; our ability to implement cost-containment strategies; the adverse effects of the COVID-19 pandemic on our business or the market price of our securities; and our ability to service, restructure or refinance our debt; our ability to be in compliance with our debt covenants; our ability to access capital on acceptable terms or at all and uncertainty in both the debt and equity capital markets; and the outcome of legal proceedings or other disputes. Other factors that could cause results to differ are described in the filings made from time to time by the Company with the U.S. Securities and Exchange Commission and include the risk factors and other risks and uncertainties described in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 and its Current Reports on Form 8-K. Except as required by law, the Company does not undertake, and hereby disclaims, any obligation to release publicly any revisions to forward-looking statements made by it to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events.
Contact:
Lisa Ramey, Vice President - Finance, Xenia Hotels & Resorts, (407) 246-8111.
For additional information or to receive press releases via email, please visit our website at www.xeniareit.com.
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Document
FOR IMMEDIATE RELEASE
DATE: October 14, 2020
XENIA HOTELS & RESORTS ANNOUNCES PROPOSED OFFERING OF SENIOR SECURED NOTES
Orlando, FL – October 14, 2020 - Xenia Hotels & Resorts, Inc. (NYSE: XHR) (“Xenia” or the “Company”) today announced that its operating partnership, XHR LP (the “Issuer”), intends to offer, subject to market conditions and other factors, $150 million aggregate principal amount of its 6.375% senior secured notes due 2025 (the “Notes”). The Notes will be senior secured obligations of the Issuer and will be fully and unconditionally guaranteed by the Company and certain of the Issuer’s subsidiaries that incur or guarantee the credit facilities or certain other indebtedness of the Issuer. The Issuer intends to use the net proceeds of the offering to repay borrowings under certain of the Company’s credit facilities and for general corporate purposes.
The Notes are being offered as “additional notes” under an existing indenture, dated August 18, 2020, pursuant to which the Issuer previously issued $300 million in aggregate principal amount of its 6.375% senior secured notes due 2025 (the “Existing Notes”). The Notes will have identical terms (other than issue date and offering price) as the Existing Notes.
The Notes and the related guarantees have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), any state securities laws or the securities laws of any other jurisdiction. The Notes may not be offered or sold in the United States absent registration or pursuant to an exemption from, or in a transaction not subject to, registration. The Notes will be offered and sold only to persons reasonably believed to be “qualified institutional buyers” in accordance with Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act.
This press release is neither an offer to sell nor a solicitation of an offer to buy the Notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the Notes or any other securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About Xenia Hotels & Resorts, Inc.
Xenia Hotels & Resorts, Inc. is a self-advised and self-administered REIT that invests in uniquely positioned luxury and upper upscale hotels and resorts, with a focus on the top 25 U.S. lodging markets as well as key leisure destinations in the United States. The Company owns 38 hotels comprising 11,024 rooms across 16 states. Xenia’s hotels are in the luxury and upper upscale segments, and operated and/or licensed by industry leaders such as Marriott, Hyatt, Kimpton, Fairmont, Loews, and Hilton, as well as leading independent management companies including The Kessler Collection and Sage Hospitality. For more information on Xenia’s business, refer to the Company website at www.xeniareit.com.
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|US-DOCS\117213899.5||
This press release contains statements as to the Company's beliefs and expectations of the outcome of future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended . You can identify these statements by the fact that they do not relate strictly to historical or current facts. Examples of these statements include, but are not limited to, statements regarding the completion and timing of the proposed offering and the use of proceeds therefrom, the status and outcome of certain asset sale transactions, the suspension of operations at our hotel properties, the anticipated impact of the COVID-19 pandemic on travel, transient and group demand, the anticipated impact of such pandemic on our results of operations, and the resulting amount of cancellation and attrition fees and cost-containment efforts. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These risks and uncertainties include, but are not limited to, the effects of the COVID-19 pandemic, including on the demand for travel, transient and group business (including, but not limited to, government-imposed travel or meeting restrictions), and levels of consumer confidence in the safety of travel as a result of the pandemic; the length of the COVID-19 pandemic and severity of such pandemic in the United States; the pace of economic recovery and the recovering of consumer confidence following the COVID-19 pandemic; our ability to implement cost-containment strategies; the adverse effects of the COVID-19 pandemic on our business or the market price of our common stock; and our ability to service, restructure or refinance our debt; our ability to be in compliance with our debt covenants; our ability to access capital on acceptable terms or at all and uncertainty in both the debt and equity capital markets; and the outcome of legal proceedings or other disputes. Other factors that could cause results to differ are described in the filings made from time to time by the Company with the U.S. Securities and Exchange Commission and include the risk factors and other risks and uncertainties described in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 and its Current Reports on Form 8-K. Except as required by law, the Company does not undertake, and hereby disclaims, any obligation to release publicly any revisions to forward-looking statements made by it to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events.
Contact:
Lisa Ramey, Vice President Finance, Xenia Hotels & Resorts, (407) 246-8111
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