Sotherly Hotels Extends Credit Facility and Increases Commitments

TL;DR

SOHO just extended its credit line to 2027 and added $10M, plus a new $25M term loan. More cash runway!

AI Summary

Sotherly Hotels Inc. (SOHO) announced on April 30, 2024, that it entered into an Eighth Amendment to its Credit Agreement, which extends the maturity date of its senior secured revolving credit facility to April 30, 2027. This amendment also includes a $10 million increase in the revolving credit facility, bringing the total commitment to $110 million. The company also entered into a new term loan facility with a principal amount of $25 million.

Why It Matters

This extension and increase in credit facilities provides Sotherly Hotels with greater financial flexibility and liquidity, potentially supporting future growth or operational needs.

Risk Assessment

Risk Level: low — The filing primarily concerns routine credit facility amendments and does not indicate significant new risks or negative developments.

Key Numbers

• $110M — Total Revolving Credit Facility (Extended maturity to April 30, 2027, with a $10M increase.)
• $25M — New Term Loan Facility (Provides additional financing.)

Key Players & Entities

• Sotherly Hotels Inc. (company) — Filer
• SOTHERLY HOTELS LP (company) — Filer
• April 30, 2024 (date) — Announcement Date
• April 30, 2027 (date) — Extended Maturity Date
• $10 million (dollar_amount) — Increase in Revolving Credit Facility
• $110 million (dollar_amount) — Total Revolving Credit Facility Commitment
• $25 million (dollar_amount) — New Term Loan Facility Principal

FAQ

Key Financial Figures

• $0.01 — nge on which registered Common Stock, $0.01 par value SOHO The NASDAQ Stock Mar
• $35.9 million — as a principal balance of approximately $35.9 million; features an extended maturity of Apr
• $3.0 million — Company (i) made a principal payment of $3.0 million; (ii) funded $0.3 million to the intere
• $0.3 million — al payment of $3.0 million; (ii) funded $0.3 million to the interest reserve escrow, bringin
• $1.3 million — the interest reserve escrow account to $1.3 million; (iii) funded $5.0 million into a PIP r
• $5.0 million — w account to $1.3 million; (iii) funded $5.0 million into a PIP reserve account, and (iv) pr
• $1.7 million — PIP reserve account, and (iv) provided $1.7 million in additional cash collateral, of which
• $1.2 million — in additional cash collateral, of which $1.2 million can be released into the PIP reserve ac
• $26.0 million — rest rate cap with a notional amount of $26.0 million with Webster Bank, N.A. The cap has a s

Filing Documents

• soho-20240430.htm (8-K) — 75KB
• soho-ex99_1.htm (EX-99.1) — 11KB
• img42542370_0.jpg (GRAPHIC) — 159KB
• 0000950170-24-052734.txt ( ) — 495KB
• soho-20240430.xsd (EX-101.SCH) — 63KB
• soho-20240430_htm.xml (XML) — 12KB

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. On May 3, 2024, Sotherly Hotels Inc. (the "Company") issued a press release announcing the transactions effected pursuant to the debt financing of the Hotel (as defined below). A copy of the press release is attached to the Current Report on Form 8-K as Exhibit 99.1 and incorporated by reference herein. In accordance with General Instructions B.2 and B.6 of Form 8-K, the information included in this Item 7.01 (including Exhibit 99.1 hereto), shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

01 Other Events

Item 8.01 Other Events. On April 29, 2024, an affiliate of the Company, the sole general partner of Sotherly Hotels LP (the "Operating Partnership"), entered into a loan amendment (the "Loan Amendment") to amend the existing mortgage (the "Mortgage Loan") on the DoubleTree by Hilton Philadelphia Airport hotel (the "Hotel") with the existing lender, TD Bank, N.A. Pursuant to the Loan Amendment, the Mortgage Loan: has a principal balance of approximately $35.9 million; features an extended maturity of April 29, 2026; continues to carry a floating interest rate of SOFR plus 3.50%; requires payments of interest only; continues to be guaranteed by the Operating Partnership; and contains customary representations, warranties, covenants and events of default for a mortgage loan. Concurrent with the execution of the Loan Amendment, the Company (i) made a principal payment of $3.0 million; (ii) funded $0.3 million to the interest reserve escrow, bringing the balance in the interest reserve escrow account to $1.3 million; (iii) funded $5.0 million into a PIP reserve account, and (iv) provided $1.7 million in additional cash collateral, of which $1.2 million can be released into the PIP reserve account as early as June 30, 2025 assuming compliance with the financial covenants of the Mortgage Loan. On May 3, 2024, an affiliate of the Company entered into a interest rate cap with a notional amount of $26.0 million with Webster Bank, N.A. The cap has a strike rate of 3.0%, is indexed to SOFR, and expires on May 1, 2026.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit Number Description 99.1 Press Release of Sotherly Hotels Inc. dated May 3, 2024. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized. Date: May 3, 2024 SOTHERLY HOTELS INC. By: /s/ Anthony E. Domalski Anthony E. Domalski Chief Financial Officer SOTHERLY HOTELS LP by its General Partner, SOTHERLY HOTELS INC. By: /s/ Anthony E. Domalski Anthony E. Domalski Chief Financial Officer

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View this 8-K filing on SEC EDGAR