(Bloomberg) -- Aimbridge Hospitality is getting advice from Evercore Inc. as the third-party hotel manager looks to shore up its cash reserves, according to people familiar with the matter.
The company, backed by private equity firm Advent International, is seeing a decline in room count, which is impacting its revenue, said some of the people, who asked not to be identified discussing a private matter.
“Under our new leadership team, the business is on a positive trajectory, and maintaining a strong, long-term capital structure is a priority for us to support and accelerate our commitment to being a best-in-class operator,” a spokesperson for Aimbridge said in an email. “We are proactive on this front, as always, and considering a range of financing opportunities.”
A representative with Advent declined to comment, while Evercore did not respond to a request for comment.
S&P Global Ratings slashed Aimbridge’s credit rating to CCC from CCC+ this month, citing a heightened refinancing risk, “unsustainable debt levels” and an expectation the company will see limited cash flow through 2025. Aimbridge’s “rooms base” has been declining partly due to hotel sales, S&P said in its report detailing the downgrade.
Aimbridge needs to tackle a load of debt maturities over the next couple of years, including a revolver that matures in February 2025, according to S&P. It also has a roughly $1 billion first-lien term loan due in 2026 and a $160 million second-lien term loan due the year after, S&P said in its report.
Though Aimbridge’s portfolio of luxury and upscale hotels are positioned to benefit from recent travel trends, S&P said the firm still faces macroeconomic pressures, like if unemployment ticks up and businesses and consumers pull back from discretionary spending.
Its term loan due in 2026 was quoted Monday afternoon at 95.375, down from 98.25 on June 20, according to data compiled by Bloomberg.
The Plano, Texas-based company appointed a new chief executive officer in February, according to a statement at the time. Its portfolio includes more than 1,500 properties and spans 23 countries, its website shows. Advent acquired a majority stake in Aimbridge in 2019.
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