Pebblebrook Hotel Trust launched and priced a private offering of $400 million aggregate principal amount of 1.625% Convertible Senior Notes due 2030 on September 16, 2025. This amount includes the full exercise of an initial purchasers' over-allotment option.
The net proceeds from the offering, approximately $389.7 million, combined with $4.1 million cash on hand, are intended to repurchase $400.0 million of its outstanding 1.75% Convertible Senior Notes due 2026 in private transactions. The new notes have an initial conversion price of approximately $15.89 per common share, representing a 37.5% premium over the September 16, 2025 closing price of $11.56.
Concurrently, the Company entered into privately negotiated capped call transactions, with an initial cap price of $20.23, a 75% premium over the common share closing price. These transactions are expected to reduce potential dilution upon conversion of the notes and/or offset cash payments.
Additionally, Pebblebrook repurchased approximately 4.3 million common shares at $11.56 per share through its existing share repurchase program in privately negotiated transactions. This comprehensive financing strategy aims to extend debt maturities, manage dilution, and return capital to shareholders.
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