Business Context and Reporting Period
Company: Ashford Hospitality Trust, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: April 28, 2022
Reporting Period: Specific event date (April 28, 2022). This filing does not cover a standard financial reporting period (e.g., quarterly or annual results).
Key Financial Metrics
This filing is a current report regarding corporate actions and does not contain financial performance data such as revenue, profit, cash flow, margins, or liquidity metrics. The filing text does not provide a clear value for these items.
Material Changes and Corporate Actions
The filing details the following material events occurring on April 28, 2022:
- Entry into Material Definitive Agreement: Execution of Amendment No. 10 to the Seventh Amended and Restated Agreement of Limited Partnership to authorize the issuance of 28,000,000 Series J and Series K Redeemable Preferred Units of the Operating Partnership.
- Material Modification to Rights of Security Holders: Filing of Articles Supplementary to reclassify and restore authorized but unissued preferred stock. The Company now has authority to issue 450,000,000 shares of capital stock (400,000,000 common; 50,000,000 preferred), with 43,481,195 shares of preferred stock currently unclassified.
- Designation of New Preferred Stock: Classification and designation of 28,000,000 shares of preferred stock as Series J and Series K Redeemable Preferred Stock.
Guidance, Outlook, and Terms of New Securities
Series J Preferred Stock:
- Stated Value: $25.00 per share.
- Dividend Rate: 8.0% annual cumulative cash dividend ($2.00 per share).
- Ranking: Senior to common stock; on parity with other outstanding preferred stock series (D, F, G, H, I); junior to all indebtedness.
Series K Preferred Stock:
- Stated Value: $25.00 per share.
- Dividend Rate: Initial annual rate of 8.2% ($2.05 per share). Increases by 0.10% per annum on each one-year anniversary, capped at 8.7%.
- Ranking: Same as Series J.
Redemption Terms:
- Holder Redemption: Holders may require redemption at 100% of Stated Value plus accrued dividends (subject to fees) until listing on a national exchange. Payment may be in cash or common stock (at Company discretion), unless the Board revokes the stock payment option.
- Company Redemption: After two years from issuance, the Company may redeem shares at 100% of Stated Value plus accrued dividends. Payment may be in cash or common stock (at Company discretion).
- Change of Control: Company may redeem within 120 days of a Change of Control at 100% of Stated Value plus accrued dividends in cash.
Offering Structure:
- Primary Offering: Up to 20,000,000 shares on a "reasonable best efforts" basis via Ashford Securities LLC (Dealer Manager).
- Dividend Reinvestment Plan (DRP): Up to 8,000,000 shares at $25.00 per share.
- Status: The Registration Statement (Form S-3) has not been declared effective by the SEC; no sales may be made until effectiveness.
Investor Verification Checklist
- Verify the effectiveness of the Form S-3 Registration Statement (File No. 333-263323) to confirm if the offering is active.
- Review the full text of the Articles Supplementary (Exhibits 3.2 and 3.3) for complete terms, covenants, and restrictions on the Series J and K Preferred Stock.
- Confirm the current status of the Company's existing indebtedness to understand the seniority of the new preferred stock relative to debt obligations.
- Monitor the Board's discretion regarding the payment method (cash vs. common stock) for redemptions, as this impacts liquidity and dilution.
- Check for any subsequent filings regarding the actual volume of shares sold under the "reasonable best efforts" offering.