Pebblebrook Hotel (PEB) prices $450 million convertible notes offering.

Pebblebrook Hotel Trust (PEB) announced today that it has priced a $450 million offering of 1.75% convertible senior notes due 2026.  The company has also granted the underwriters an option to purchase up to an additional $50 million of notes to cover over-allotments, if any.

In connection with the offering, PEB has entered into a series of capped call transactions that are designed to reduce potential dilution to common shares upon any conversion of the notes.  After paying for the cost of the call transactions, Pebblebrook said that it would use remaining proceeds from the offering to reduce revolving credit and term loan borrowings.

Pebblebrook Hotel is an equity REIT focusing on the ownership of upper-upscale and luxury hotel properties across the U.S.  The company's current portfolio includes 53 properties/13,236 rooms in 14 markets, with concentrations in San Francisco, Boston, San Diego, and Los Angeles. Pebblebrook was formed in 2009 and has an undepreciated book capitalization of approximately $6.5 billion.