Nashville-based Ryman (NYSE:RHP) Hospitality Properties, Inc. (NYSE:RHP) has successfully renegotiated the terms of its existing credit facilities, according to a recent 8-K filing with the SEC.
The real estate investment trust, which specializes in hospitality and entertainment assets, announced the amendment of its credit agreement through its subsidiaries OEG Borrower, LLC and OEG Finance, LLC.
The amended credit facilities, which were finalized on Thursday, consist of a $300 million term loan and an $80 million revolving credit facility. This refinancing effort has resulted in more favorable interest rates, extended maturity dates, and adjusted covenants for the company. The term loan, which was previously at $294.75 million, now carries a lower interest rate and is set to mature on June 28, 2031. The revolving credit facility, increased from $65 million with $17 million drawn as of the amendment date, will now mature on June 28, 2029.
The secured loans are backed by substantially all assets of OEG Finance and its subsidiaries, excluding certain specified entities. Interest rates for the term loan are set at either the Alternate Base Rate plus 2.5% or Adjusted Term SOFR plus 3.5%. For the revolving credit, the rates are based on a sliding scale linked to the First Lien Leverage Ratio, ranging from 2.25% to 2.75% for Alternate Base Rate loans and 3.25% to 3.75% for Adjusted Term SOFR loans.
Proceeds from the term loan will be used to refinance the original term loan from the 2022 credit agreement, which was associated with an investment in OEG by Atairos Group, and to repay an intercompany note that facilitated the payoff of the company's Term Loan A in 2022 for general corporate purposes.
The news above is based on an SEC filing.
In other recent news, Ryman Hospitality Properties showcased a strong financial performance in the first quarter of 2024, achieving record same-store hospitality Average Daily Rate (ADR), revenue, and adjusted Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent or Restructuring costs (EBITDAre). Additionally, the company reported high banquet and audiovisual revenues despite facing weather-related and construction challenges. Ryman Hospitality also highlighted its robust balance sheet, recent financing activities, and liquidity, alongside future investment and expansion plans.
In a separate development, Truist Securities revised its price target for Ryman Hospitality Properties, setting it at $130.00, down from the previous $135.00. The recommendation on the stock remains a Buy. The adjustment followed a reevaluation of Ryman's projected earnings and adjusted funds from operations per share. Truist's new price target is based on the application of valuation multiples to Ryman's EBITDA estimates, with the multiples for the Hospitality and Entertainment segments remaining unchanged.
InvestingPro Insights
As Ryman Hospitality Properties, Inc. (NYSE:RHP) navigates its financial restructuring with amended credit facilities, real-time data from InvestingPro provides additional insights into the company's financial health and market performance. With a market capitalization of $5.95 billion and a trailing twelve-month P/E ratio of 19.54, the company is trading at a relatively low multiple compared to its earnings growth. This is further underscored by a PEG ratio of 0.66 for the last twelve months as of Q1 2024, suggesting that the stock could be undervalued relative to its earnings growth potential.
The company's stock price has exhibited volatility, yet it remains profitable with a solid foundation, as evidenced by a gross profit margin of 35.24% and an operating income margin of 20.01% for the last twelve months as of Q1 2024. Additionally, Ryman Hospitality's liquid assets surpass its short-term obligations, providing financial flexibility. This is particularly relevant for investors considering the company's recent refinancing efforts.
InvestingPro Tips highlight that analysts predict the company will maintain profitability this year, and it has indeed been profitable over the last twelve months. For those looking to delve deeper into Ryman Hospitality's financials, InvestingPro offers additional tips to help investors make informed decisions. With the use of coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, granting access to more exclusive insights, including 5 additional InvestingPro Tips for RHP.
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