San Clemente-based Sunstone Hotel Investors Inc. has reworked a line of credit as part of the hotel owner’s ongoing efforts to get a handle on its debt.
Sunstone, which owns all or part of some 40 hotels, said it cut the size of a line of credit to $85 million from $200 million in exchange for an easing of terms by lenders.
The line of credit now is backed by five of Sunstone’s hotels: the Fairmont Newport Beach, Hyatt Regency Newport Beach, Renaissance LAX, Sheraton Cerritos and the Residence Inn Rochester Mayo Clinic in Minnesota.
The move is part of a bigger effort by Sunstone to restructure its debt.
Earlier this year, the company announced a plan to buy back $182 million worth of debt due in 2027.
The moves are aimed at “strengthening our balance sheet and providing us with the flexibility necessary to preserve cash and maximize the value of our company,” Chief Executive Art Buser said.
Sunstone has $1.7 billion in long-term debt with none of it due in the near term. The company had $174 million in cash at the end of March.
In early June, the company made headlines by handing back the W Hotel in San Diego to lenders.
Sunstone had sought to rework its $65 million loan on the W Hotel but couldn’t come to terms with its lenders.
The company said it would rather forfeit the hotel than continue making payments on a mortgage that’s now worth more than the hotel itself.
