HST Host Hotels and Resorts Inc

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

As previously disclosed, on August 1, 2019, Host Hotels & Resorts, L.P. (“Host L.P.”), of which Host Hotels & Resorts, Inc. (“Host Inc.”) is the sole general partner and of which it holds approximately 99% of the partnership interests in Host L.P., entered into the fifth amended and restated senior revolving credit and term loan facility (the “Credit Facility”), with Bank of America, N.A., as administrative agent, JPMorgan Chase Bank, N.A and Wells Fargo Bank, N.A. as co-syndication agents, and certain other agents and lenders. The Credit Facility allows for revolver borrowings in an aggregate principal amount of up to $1.5 billion. The Credit Facility also provides for a term loan facility of $1 billion (which is fully utilized).  The material terms of the Credit Facility are described under Item 2.03 of Host Inc.’s and Host L.P.’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on August 6, 2019, which description is incorporated by reference herein.

As of December 31, 2019, Host L.P. had $1.5 billion of availability under the revolver portion of its Credit Facility. On March 16, 2020, Host L.P. provided notice to the lenders to borrow the entire available amount under the revolver portion of its Credit Facility so that a total of $1.5 billion is currently outstanding. The current interest rate for borrowings under the revolving portion of the Credit Facility is LIBOR plus 90 basis points based on Host L.P.’s current unsecured long-term debt rating.

Host L.P. increased its borrowings under the revolver portion of the Credit Facility as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the global coronavirus (COVID-19) outbreak. The proceeds from the borrowings under the revolver portion of the Credit Facility are currently being held on Host L.P.’s balance sheet, resulting in total cash and cash equivalents of approximately $2.8 billion as of March 20, 2020. In accordance with the terms of the Credit Facility, the proceeds from the borrowings under the revolver portion of the Credit Facility may be used for working capital, general corporate or other purposes.

Jim Risoleo, President and Chief Executive Officer, said, “Out of an abundance of caution, we have drawn $1.5 billion under the revolver portion of our Credit Facility providing Host with a total of approximately $2.8 billion of cash as of the date of this 8-K filing. We continue to maximize our financial flexibility as the duration and magnitude of the impact of COVID-19 on global travel demand remain uncertain. We are pleased to have executed a prudent and disciplined capital allocation strategy that prioritized creating significant balance sheet capacity and liquidity in recent years and expect our judicious capital allocation decisions to benefit all our stakeholders in the long-term.”

Mr. Risoleo continued, “Our world-class operators, including Marriott, Hyatt and Hilton, have coordinated with us to develop detailed cost-cutting contingency plans to eliminate unnecessary costs at each of our hotels. These plans are tailored to address the specific operational needs of each property and are expected to significantly reduce Host’s operating costs through this period of uncertainty.”