Lodging REIT to Sell Preferred Issue

Braemar Hotels and Resorts (NYSE:BHR) will be sellingĀ  a new perpetual preferred issue.

It has been quite some time since we have had an issue come to market from the REIT lodging sector so it will be interesting to see what the issue is priced at coupon wise.

Proceeds will be used for the purchase of a property in the Lake Tahoe area.

All the terms of the issue will be the normal terms with an optional redemption in 5 years, cumulative dividend, NON qualified for preferential tax treatment etc.

The company currently has 1 convertible preferred outstanding (BHR-B) with a coupon of 5.5% which is trading at $17.80/share right now.

The preliminary information can be read here.

The new issue will be unrated–thus junk.

4 thoughts on “Lodging REIT to Sell Preferred Issue”

  1. Formerly Ashford Prime. Small REIT only owns 12 properties. I wouldn’t consider this unless the coupon was over 8%

  2. Thanks for the update Tim. While I love the REIT sector, I normally try to avoid the lodging sector as I really prefer REITS that have long-term leases.

    I agree with George – not attractive at all unless they pay over 8% on the issue.

    1. Yes kaptain I stay away from them mostly because I know when/if the next recession hits these guys are all at risk.

      1. I agree Tim. I’d rather own some REITs that have leases locked in for 5, 10 or even 15 years as compared to a REIT that rents to people on a nightly basis.

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