Pebblebrook Hotel Trust drops after pricing $350 mln convertible debt deal

Pebblebrook Hotel Trust

17/09/2025 12:43

** Pebblebrook Hotel Trust's PEB.N shares down 4.8% at $11.01 premarket after it secures capital raise to refinance some debt

** Hotel and resort REIT early Weds announces pricing  private offering of $350 mln 1.625% convertible bonds (CBs) due 2030

** Initial conversion price set at $15.89, 37.5% above stock's last sale of $11.56 on Tues

** Co intends to use net offering proceeds and cash to repurchase approx $400 mln principal of its outstanding 1.75% CBs due 2026

** It also entered into capped call transactions with purchasers of the CBs to help reduce potential dilution

** The initial cap price of these transactions is $20.24, a 75% premium over stock's last close

** Bethesda, Maryland-based PEB has ~$1.4 bln market cap, based on ~118.6 mln shares outstanding

** Through Tues close, PEB shares fell ~15% YTD

** Of 12 analysts covering PEB, recommendation breakdown is 2 "strong buy" or "buy", 8 "hold" and 2 "sell" ratings; median PT is $11, according to LSEG

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))