Item 1.01. Entry into a Material Definitive Agreement.
The information required by this item is included in Item 2.03 below and is
incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On November 23, 2021, Host Hotels & Resorts, L.P. ("Host L.P."), for whom Host
Hotels & Resorts, Inc. acts as sole general partner, completed its underwritten
public offering of $450 million aggregate principal amount of its 2.900% Series
J Senior Notes due 2031 (the "Series J senior notes"). The interest rate payable
on the Series J senior notes will be subject to adjustment based on certain
rating events.
The offering of the Series J senior notes was made pursuant to an effective
shelf registration statement filed with the Securities and Exchange Commission
on April 15, 2021, as amended (Registration No. 333-255255) (the "Registration
Statement"), a base prospectus, dated April 23, 2021, included as part of the
Registration Statement, and a prospectus supplement, dated November 8, 2021,
filed with the Securities and Exchange Commission pursuant to Rule 424(b) under
the Securities Act of 1933, as amended. In connection with the filing of the
prospectus supplement, we are filing as Exhibit 5.1 to this Current Report on
Form 8-K an opinion of our counsel, Latham & Watkins LLP, regarding the validity
of the securities being registered.
The Series J senior notes were issued pursuant to the seventh supplemental
indenture, dated November 23, 2021 (the "Supplemental Indenture"), between Host
L.P. and The Bank of New York Mellon, as trustee (the "Trustee"), which
supplements the indenture, dated May 15, 2015 (as supplemented to date, the
"Indenture"), between Host L.P. and the Trustee. The Series J senior notes pay
interest semi-annually in arrears.
Optional Redemption Provisions
At any time, upon not less than 15 nor more than 60 days' notice, the Series J
senior notes will be redeemable at Host L.P.'s option, in whole or in part, at a
price equal to 100% of their principal amount, plus a make-whole premium as set
forth in the Indenture, plus accrued and unpaid interest to, but excluding, the
applicable redemption date.
Host L.P. may also redeem the Series J senior notes within the period beginning
90 days prior to the December 15, 2031 maturity date (September 16, 2031), in
whole or in part, upon not less than 15 nor more than 60 days' notice, at a
redemption price equal to 100% of the principal amount of the Series J senior
notes to be redeemed, plus accrued and unpaid interest to, but excluding, the
applicable redemption date.
Restrictive Covenants
Under the terms of the Indenture, Host L.P.'s ability to incur indebtedness is
subject to restrictions and the satisfaction of various conditions, including
the achievement of an EBITDA-to-interest coverage ratio of at least 1.5x by Host
L.P. This ratio is calculated in accordance with the Indenture and excludes from
interest expense items such as call premiums and deferred financing charges that
are included in interest expense on Host L.P.'s consolidated statement of
operations. In addition, the calculation is based on Host L.P.'s pro forma
results for the four prior fiscal quarters giving effect to certain
transactions, such as acquisitions, dispositions and financings, as if they
occurred at the beginning of the period. Other covenants limiting Host L.P.'s
ability to incur indebtedness include maintaining total indebtedness of less
than 65% of adjusted total assets (using undepreciated real estate values) and
maintaining secured indebtedness of less than 40% of adjusted total assets;
provided that Host L.P. will not be required to satisfy such indebtedness tests
in the event that the indebtedness incurred qualifies as Refinancing
Indebtedness (as defined in the Supplemental Indenture). In addition, Host L.P.
will at all times be required to maintain total unencumbered assets of at least
150% of the aggregate principal amount of outstanding unsecured indebtedness of
Host L.P. and its subsidiaries. So long as Host L.P. maintains the required
level of interest coverage and satisfies these and other conditions in the
Indenture, it may incur additional debt under the Indenture.
Use of Proceeds
Host L.P. intends to fully allocate an amount equal to the net proceeds from the
sale of the Series J senior notes on the issue date to one or more eligible
green projects.
Following the allocation referenced above, Host L.P. intends to use the net
proceeds from the sale of the Series J senior notes to redeem all of the
outstanding $400 million aggregate principal amount of Host L.P.'s 3.750% Series
D senior notes due 2023 (the "Series D senior notes"). Host L.P. intends to use
any remaining proceeds that are not used to redeem the Series D senior notes for
general corporate purposes.
The foregoing description of the Supplemental Indenture does not purport to be
complete and is qualified in its entirety by reference to the full text of such
document, which is filed herewith as Exhibit 4.1 and is incorporated herein by
reference.
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Forward-Looking Statements
In this Current Report on Form 8-K, we make forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are identified by their use of terms and phrases such
as "anticipate," "believe," "could," "expect," "may," "intend," "predict,"
"project," "plan," "will," "estimate" and other similar terms and phrases.
Forward-looking statements are based on management's current expectations and
assumptions and are not guarantees of future performance. Forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause our actual results to differ materially from those anticipated
at the time the forward-looking statements are made. These risks and
uncertainties include the impact of COVID-19, our ability to apply the proceeds
of the Series J senior notes as currently intended, our ability to use or
allocate the net proceeds of the Series J senior notes to eligible green
projects that will satisfy, or continue to satisfy, investor criteria and
expectations regarding environmental impact and sustainability performance and
other risks and uncertainties associated with our business described in our
Annual Report on Form 10-K for the year ended December 31, 2020, our Quarterly
Reports on Form 10-Q and in other filings with the Securities and Exchange
Commission. Although we believe the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, we can give no
assurance that we will attain these expectations or that any deviations will not
be material. Except as otherwise required by the federal securities laws, we
disclaim any obligations or undertaking to publicly release updates to any
forward-looking statement contained in this report to conform the statement to
actual results or changes in our expectations.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
4.1 Seventh Supplemental Indenture, dated November 23, 2021, between
Host Hotels & Resorts, L.P. and The Bank of New York Mellon, as
trustee, to the Indenture dated May 15, 2015.
4.2 Form of Series J senior notes (included in Exhibit 4.1).
5.1 Opinion of Latham & Watkins LLP regarding the validity of the
Series J senior notes.
23.1 Consent of Latham & Watkins LLP (included in Exhibit 5.1).
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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