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NEW YORK - DiamondRock Hospitality Company (NYSE:DRH), a hospitality REIT with a market capitalization of $1.69 billion, announced Wednesday it has successfully refinanced, upsized, and extended its senior unsecured credit facility to $1.5 billion from the previous $1.2 billion. According to InvestingPro data, the company currently trades at an attractive EBITDA multiple of 9.9x, suggesting potential value for investors.
The refinanced credit facility includes a $400 million revolving credit facility maturing in January 2031, a $500 million term loan maturing in January 2029, and two $300 million term loans maturing in January 2030. All components include extension options and the term loans are prepayable without penalty. This refinancing comes at a crucial time, as InvestingPro analysis indicates the company’s current ratio stands at 0.82, with short-term obligations exceeding liquid assets.
DiamondRock is using the additional $300 million to repay three mortgage loans that matured or will mature in 2025. The company has already repaid approximately $125 million in mortgage loans for the Worthington Renaissance Fort Worth Hotel and the Hotel Clio in May and July 2025, respectively. It plans to prepay the $166.6 million mortgage loan secured by the Westin Boston Seaport District in September.
Following these repayments, DiamondRock will have no debt maturities until January 2028, and its portfolio of 36 hotels and resorts will be fully unencumbered by secured debt.
"Maintaining low leverage and no debt maturities until 2028 increases our financial flexibility and positions the Company to take advantage of internal and external capital allocation opportunities over the next several years," said Briony Quinn, DiamondRock’s Executive Vice President, Chief Financial Officer and Treasurer, in the press release. For deeper insights into DRH’s financial health and growth prospects, including exclusive ProTips and comprehensive valuation metrics, visit InvestingPro, where you’ll find detailed analysis in our Pro Research Report, available for over 1,400 US stocks.
Wells Fargo Securities, BofA Securities, U.S. Bank National Association and TD Bank served as joint lead arrangers and joint bookrunners of the credit facility, with several other financial institutions participating in various capacities.
In other recent news, Diamondrock Hospitality reported its first quarter 2025 earnings, aligning with analyst expectations for earnings per share (EPS) at $0.04 but missing revenue forecasts with actual revenue at $251.8 million, compared to the anticipated $258.42 million. Despite the revenue shortfall, Citi analysts maintained a Neutral rating on the company, adjusting the price target from $9.00 to $8.00. They noted that the second quarter 2025 operating funds from operations (FFO) forecast remains steady at $0.34, while the full-year 2025 estimated operating FFO has been slightly increased to $1.00 from $0.97.
Meanwhile, Texas Capital Securities initiated coverage on D.R. Horton with a Hold rating and set a price target of $130.00. The firm highlighted D.R. Horton’s extensive geographical reach and diverse buyer segments as key factors in its assessment. These developments reflect the ongoing evaluations and adjustments by analysts in response to recent performance and strategic positioning of these companies.
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