Terms

Series

8.25% Series D Cumulative Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

8.25%

Rate Type

Fixed

Annual Dividend

$2.06

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

November 20, 2023

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness, Any Future Senior Equity Securities; Pari Passu With: 5.50% Series B Cumulative Convertible Preferred Stock, Any Future Parity Preferred Securities; Senior To: Common Stock, Any Future Junior Equity Securities

Regulatory (Basel III) Call

No

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

1,600,000

Prospectus Summary

Braemar Hotels & Resorts Inc. (NYSE: BHR), a Maryland-incorporated externally-advised REIT focused on luxury hotels, is issuing 1,600,000 shares of its 8.25% Series D Cumulative Preferred Stock at a $25.00 liquidation preference per share, with an annual dividend of $2.0625 per share paid quarterly. The first call date is November 20, 2023, at $25.00 per share. These are direct preferred shares (not depositary shares). The stock is cumulative, meaning that any unpaid dividends accrue and must be paid in full before any distributions can be made to common stockholders. The Series D Preferred Stock sits above common equity and future junior securities in the capital stack, ranking pari passu with Braemar's existing 5.50% Series B Cumulative Convertible Preferred Stock. It is junior to all of Braemar's existing and future indebtedness — approximately $985.7 million as of September 30, 2018. As a holding company issuer, the preferred stock is structurally subordinated: the operating partnership (Braemar OP) must service its debt obligations before upstream distributions reach preferred holders. There is no regulatory capital call provision (Braemar is a REIT, not a bank), but the issuer may redeem prior to November 2023 solely to preserve REIT status or upon a qualifying Change of Control. At the $25.00 public offering price, the Series D Preferred Stock yields exactly 8.25% annually ($2.0625/year, or $0.515625/quarter), paid on January 15, April 15, July 15, and October 15, with record dates at the close of business on the last day of March, June, September, and December. Because Braemar is a REIT, dividends are generally treated as ordinary income and are not expected to qualify for the preferential 15%/20% qualified dividend income (QDI) rate for individual investors or the dividends-received deduction (DRD) for corporate holders. Dividend payments can be interrupted if a default occurs under Braemar's secured revolving credit facility, or if the board exercises discretion not to declare dividends; however, the cumulative feature ensures arrears must be satisfied before any junior distributions are made.

Summarized from the SEC prospectus filing.

Distribution History

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Braemar has not paid all accumulated Series D Preferred Stock dividends in full, it cannot pay dividends on or repurchase common stock or parity preferred stock; additionally, a default under the secured revolving credit facility can prevent dividend payments on the Series D Preferred Stock.

Other Preferreds from Braemar Hotel & Resorts Inc

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 31 (Weak)