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Ashford Hospitality Suspends Preferred Payments

Lodging REIT Ashford Hospitality (AHT) has finally suspended their preferred stock dividends. It was obvious that this was coming. Shares are tumbling on the official news (we all knew this was coming–only a fool would keep paying when they are fighting for survival).

The company joins Hersha Hospitality (HT) and Sotherly Hotels (SOHO) in having their preferred dividends suspended.

The preferreds are cumulative, meaning they will have to pay the suspended dividends before they ever pay another common dividend. This assumes that the company is solvent enough in the future to do so.

Ashford carries a ton of debt (over $4 billion)–but all debt is at the property level so I suspect we will see the REIT walk away from many properties instead of continuing to make debt payments–the company has over $200 million of cash on hand.

A chart of all lodging REIT preferred can be seen here.

The SEC announcement is here.

One thought on “Ashford Hospitality Suspends Preferred Payments”

  1. Just an update from the conference call for anyone interested, their goal/hope is to bring the pfd’s current by year end, but sounds like they will float some more after that is done. They have swapped common for prefs during this whole thing so there are a lot less outstanding at the moment.

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