DALLAS, Dec. 18, 2012 /PRNewswire/ -- Ashford Hospitality Trust, Inc. (NYSE: AHT) today announced that the Company, along with its joint venture partner, Prudential Real Estate Investors, has closed a $103.0 million loan secured by the Hilton Boston Back Bay Hotel in Boston, Massachusetts. This hotel is part of the Company's Highland Hospitality Portfolio, which is held in a joint venture with PREI®, of which Ashford has a 71.74% ownership interest. Terms described in this press release refer to 100% of the loan indebtedness unless otherwise indicated.
The new financing, which has a five-year term and bears interest at a fixed interest rate of 4.38%, replaces an existing $63.0 million loan on the property with a fixed interest rate of 5.96%. At closing, $31.9 million of the excess loan proceeds were used to pay down the mezzanine debt balance on the overall Highland Hospitality Portfolio, which had an average interest rate of 8.4%, thereby achieving annual interest savings of approximately $2.0 million.
"We continue to take advantage of the current favorable interest rate environment and attractive debt capital markets, allowing us to further decrease our annual interest expense on the Highland Hospitality Portfolio." said Monty J. Bennett, Chief Executive Officer of Ashford Hospitality Trust. "We are also actively pursuing early refinancing of other hotel assets to lower our interest rate and obtain excess proceeds. This strategy is succeeding in reducing near term refinancing risk while increasing the weighted average maturity of our loans. We hope to have an update soon on the progress of our other refinancing initiatives, including the Renaissance Nashville and Westin Princeton loans. As always, we remain keenly focused on maximizing value for our shareholders."
Ashford is a self-administered real estate investment trust focused on investing in the hospitality industry across all segments and at all levels of the capital structure. Additional information can be found on the Company's website at www.ahtreit.com.Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such forward-looking statements include, but are not limited to, the timing for closing, the impact of the transaction on our business and future financial condition, our business and investment strategy, our understanding of our competition and current market trends and opportunities and projected capital expenditures. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Ashford's control.