Xenia Hotels & Resorts Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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| Item 1.01 | Entry into a Material Definitive Agreement. |
6.625% Senior Notes due 2030
Indenture
On November 25, 2024, XHR LP (the “Issuer”), a subsidiary of Xenia Hotels & Resorts, Inc. (the “Company”), issued $400 million aggregate principal amount of its 6.625% senior notes due 2030 (the “Notes”) under an indenture, dated November 25, 2024 (the “Indenture”), among the Issuer, the Company, the subsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee (the “Trustee”).
Private Offering
The Notes were sold in the United States only to accredited investors pursuant to an exemption from the Securities Act of 1933, as amended (the “Securities Act”), and subsequently resold to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in accordance with Regulation S under the Securities Act.
Use of Proceeds
The Issuer used the net proceeds from the offering of the Notes, together with cash on hand, to redeem in full its outstanding 6.375% senior notes due 2025, and to pay certain fees and expenses in connection with, or otherwise related to, the offering of the Notes and the use of proceeds therefrom.
Maturity and Interest
The Notes will mature on May 15, 2030. Interest on the Notes will accrue at a rate of 6.625% per annum. Interest on the Notes will be payable semi-annually in cash in arrears on May 15 and November 15 of each year, commencing on May 15, 2025. Interest will accrue from November 25, 2024.
Guarantees
The Notes are fully and unconditionally guaranteed, jointly and severally, by the Company and certain of the Issuer’s subsidiaries that incur or guarantee any indebtedness under the Issuer’s amended and restated credit agreement, dated November 4, 2024, certain other bank indebtedness or any other material capital markets indebtedness (each, a “subsidiary guarantor” and together with the Company, the “guarantors”).
Redemption
The Issuer may redeem the Notes at any time prior to May 15, 2027, in whole or in part, at a redemption price equal to 100% of the accrued principal amount thereof plus unpaid interest, if any, to, but excluding, the redemption date, plus a make-whole premium. The Issuer may redeem the Notes, in whole or in part, at any time on or after May 15, 2027, in whole or in part, at a redemption price equal to (i) 103.313% of the principal amount thereof, should such redemption occur before May 15, 2028, (ii) 101.656% of the principal amount thereof, should such redemption occur before May 15, 2029, and (iii) 100.000% of the principal amount thereof, should such redemption occur on or after May 15, 2029, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
In addition, at any time from time to time prior to May 15, 2027, the Issuer may redeem up to 40% of the original aggregate principal amount of the Notes with the net cash proceeds from certain equity offerings at a redemption price of 106.625% of the principal amount redeemed plus accrued and unpaid interest, if any, to, but excluding, the redemption date, so long as at least 60% of the aggregate principal amount of the Notes remains outstanding immediately after the occurrence of such redemption.
Covenants
The Indenture contains customary covenants that will limit the Issuer’s ability and, in certain instances, the ability of the Issuer’s subsidiaries, to borrow money, create liens on assets, make distributions and pay dividends on or redeem or repurchase stock, make certain types of investments, sell stock in certain subsidiaries, enter into agreements that restrict dividends or other payments from subsidiaries, enter into transactions with affiliates, issue guarantees of indebtedness, and sell assets or merge with other companies. These limitations are subject to a number of important exceptions and qualifications set forth in the Indenture. In addition, the Indenture will require the Issuer to maintain total unencumbered assets as of each fiscal quarter of at least 150% of total unsecured indebtedness, in each case calculated on a consolidated basis. Although the Company will guarantee the notes, the Company will not be subject to the covenants or conditions contained in the Indenture.
Change of Control
In the event of a change of control and certain credit rating downgrades of the Notes, the Issuer may be required to make an offer to repurchase the Notes at a repurchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
Events of Default
Events of default under the Indenture include, among others, the following with respect to the Notes: default for 30 days in the payment when due of interest on the Notes; default in payment when due of the principal of, or premium, if any, on the Notes; failure to comply with certain covenants in the Indenture and related security documents for 60 days upon the receipt of notice from the Trustee or holders of at least 25% in aggregate principal amount of the Notes; acceleration or payment default of indebtedness of the Issuer or a significant subsidiary thereof in excess of a specified amount that remains uncured for 30 days; final judgments against the Issuer or a significant subsidiary thereof in excess of a specified amount that remains unpaid for 60 days; and certain events of bankruptcy or insolvency with respect to the Company, the Issuer or a significant subsidiary thereof. In the case of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company, the Issuer or a significant subsidiary thereof, all Notes then outstanding will become due and payable immediately without further action or notice. If any other event of default occurs with respect to the Notes, the Trustee or holders of at least 25% in aggregate principal amount of the Notes may declare all Notes then outstanding to be due and payable immediately.
The foregoing description of the Indenture and the Notes does not purport to be complete and is qualified in its entirety by the full text of the Indenture and the Notes, respectively, copies of which are filed as Exhibits 4.1 and 4.2 to this Current Report on Form 8-K, respectively, and incorporated herein by reference. This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy the Notes.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 2.03.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit No. |
Description | |
| 4.1 | Indenture, dated November 25, 2024, among XHR LP, Xenia Hotel & Resorts, Inc., the subsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee. | |
| 4.2 | Form of 6.625% Senior Note due 2030 (included in Exhibit 4.1). | |
| 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.
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Xenia Hotels & Resorts, Inc. | |||||
| Date: November 25, 2024 | By: | /s/ Atish Shah | ||||
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Name: | Atish Shah | ||||
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Title: | Executive Vice President and Chief Financial Officer | ||||