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Ashford Hospitality Trust's CEO Hosts Analyst/Investor Day (Transcript)

And portfolio A has about $1.4 billion of non-recourse debt in it and when you buy a share of our stock at say 9 buck where and that where is trading now, about 90% of that value is attributable to this portfolio A. It's lower levered, it's safer, it's good quality assets et cetera. Portfolio B has about $1.7 billion worth of debt on it. When you pay $9 for a share of stock about 10% of that is attributed to this value in this portfolio. All non-recourse debt and the idea is that since when you have non-recourse debt on asset, you can't have negative equity. You have the ability to just hand properties back if times go tough which we did during the great recession. We handed a couple back and you really have to look at our company with these two pools, so the first pool is safer, it's lower leveraged. It's where most of our value is.

The second pool is higher leveraged, but it is non-recourse and it has a small amount of equity value in it. So if we get into tough times we can take that portfolio be so called and push it off and get rid of it and we are lower leveraged. But right now since portfolio be as cash-flow positive, it makes all the sense in the world to hang on to it for its optionality and it has got great optionality and great upside and it has all the benefits of being higher leveraged.

So the point I am trying to make is that we have a unique situation where we had the benefits of all the upside in a higher leverage platform, but also if downside happens in the industry, we can just shove off some of these assets and still be in great shape. So it’s an optionality that I want to emphasize and I think it is important.

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