AUSTIN, Texas, Jan. 6, 2021 /PRNewswire/ -- Summit Hotel
Properties, Inc. (NYSE: INN) (the "Company") today announced that
it has launched an underwritten public offering of $200,000,000 aggregate principal amount of its
Convertible Senior Notes due 2026 (the "Notes"). The Company
expects to grant the underwriters a 13-day option to purchase up to
an additional $30.0 million aggregate
principal amount of the Notes solely to cover over-allotments, if
any.
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Prior to August 15, 2025, the
Notes will be convertible only upon certain circumstances and
during certain periods, and thereafter will be convertible at any
time prior to the close of business on the second scheduled trading
day prior to maturity of the Notes. Upon conversion, holders will
receive cash, shares of common stock of the Company, (the "Common
Stock") or a combination thereof at the Company's election. The
Notes will be issued under the Company's currently effective shelf
registration statement filed with the Securities and Exchange
Commission. The interest rate, conversion rate and other terms of
the Notes will be determined at the time of pricing of the
offering. The Notes will be the Company's senior unsecured
obligations and will rank equally with all of its present and
future senior unsecured debt and senior to any future subordinated
debt.
BofA Securities and Deutsche Bank Securities are the joint
book-running managers of the offering.
In connection with the pricing of the Notes, the Company expects
to enter into one or more privately negotiated capped call
transactions with one or more of the underwriters or their
respective affiliates or other financial institutions (the "Option
Counterparties"). The capped call transactions will cover, subject
to customary adjustments, the number of shares of Common Stock
underlying the Notes. The capped call transactions are generally
expected to reduce the potential dilution to the Common Stock upon
any conversion of the Notes and/or offset any cash payments the
Company is required to make in excess of the principal amount of
such converted Notes, as the case may be, with such reduction
and/or offset subject to a cap.
In connection with establishing their initial hedges of the
capped call transactions, the Option Counterparties or their
respective affiliates expect to purchase shares of Common Stock
and/or enter into various derivative transactions with respect to
the Common Stock concurrently with or shortly after the pricing of
the Notes. This activity could increase (or reduce the size of any
decrease in) the market price of the Common Stock or the Notes at
that time.
In addition, the Option Counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to the Common Stock
and/or purchasing or selling Common Stock or other securities of
the Company in secondary market transactions following the pricing
of the Notes and prior to the maturity of the Notes (and are likely
to do so following any conversion, purchase, or redemption of the
Notes, to the extent the Company exercises the relevant election
under the capped call transactions). This activity could also cause
or avoid an increase or a decrease in the market price of the
Common Stock or the Notes, which could affect the ability of
holders to convert the Notes. To the extent the activity occurs
during any observation period related to a conversion of the Notes,
it could also affect the number of shares of Common Stock and value
of the consideration that holders will receive upon conversion of
the Notes.
The Company intends to use a portion of the net proceeds from
the offering of the Notes to pay the cost of the capped call
transactions. If the underwriters exercise their over-allotment
option to purchase additional Notes, the Company expects to use a
portion of the net proceeds from the sale of such additional Notes
to enter into additional capped call transactions. The Company will
contribute the remaining net proceeds to its operating partnership.
The operating partnership will use the remaining net proceeds to
reduce its outstanding indebtedness, including amounts outstanding
under the Company's senior unsecured revolving credit facility and
term loans.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
these securities, in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction.
Copies of the preliminary prospectus supplement and base
prospectus relating to the Notes may be obtained by contacting BofA
Securities, NC1-004-03-43, 200 North College Street, 3rd floor,
Charlotte NC 28255-0001,
Attention: Prospectus Department, email:
dg.prospectus_requests@bofa.com and Deutsche Bank Securities,
Attention: Prospectus Group, 60 Wall Street, New York, NY 10005-2836, by email to
prospectus.cpdg@db.com, or by telephone at (800)
503-4611.
About Summit Hotel Properties, Inc.
Summit Hotel Properties, Inc. is a publicly traded real estate
investment trust focused on owning premium-branded hotels with
efficient operating models primarily in the Upscale segment of the
lodging industry. As of January 6,
2021, the Company's portfolio consisted of 72 hotels, 67 of
which were wholly owned, with a total of 11,288 guestrooms located
in 23 states.
This press release contains statements that are
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Act of 1934, as amended, pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on certain assumptions and can
include future expectations, future plans and strategies, financial
and operating projections or other forward-looking information.
These forward-looking statements are subject to various risks and
uncertainties, not all of which are known to the Company and many
of which are beyond the Company's control, which could cause actual
results to differ materially from such statements. For example, the
fact that the offering has launched may imply that the offering
will price, but pricing is subject to conditions customary in
transactions of this type and may be delayed or may not occur at
all. In addition, the fact that the underwriters have an
over-allotment option may imply that this option will be exercised.
However, the underwriters are not under any obligation to exercise
this option, or any portion of it, and may not do so. Investors
should not place undue reliance upon forward-looking
statements.
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SOURCE Summit Hotel Properties, Inc.