Terms

Series

6.375% Series I Cumulative Redeemable Preferred Shares of Beneficial Interest

Liquidation Preference

$25.00

Coupon Rate

6.375%

Rate Type

Fixed

Annual Dividend

$1.59

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

March 4, 2018

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Debt Obligations Of Lasalle Hotel Properties; Pari Passu With: Other Series Of Preferred Shares Of Beneficial Interest On Parity; Senior To: Common Shares Of Beneficial Interest, Any Junior Preferred Shares

Regulatory (Basel III) Call

Yes

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

4,000,000

Prospectus Summary

LaSalle Hotel Properties, a REIT, is offering 4,000,000 shares of its 6.375% Series I Cumulative Redeemable Preferred Shares of Beneficial Interest at a liquidation preference of $25.00 per share, with a fixed annual dividend of $1.59375 per share ($0.3984 quarterly). These are direct preferred shares — not depositary shares. The shares are cumulative, meaning that if the issuer fails to pay a scheduled distribution, the unpaid amount accrues and must be paid in full before any distributions can be made to common shareholders. The first call date is March 4, 2018, at $25.00 per share plus accrued dividends. The Series I Preferred Shares sit above LaSalle's common shares and any junior preferred securities in the capital stack, but are subordinate to all of the company's debt obligations. As a holding company REIT issuer, structural subordination means preferred holders rank behind creditors of the operating partnership and hotel-level debt. A special optional redemption right allows the issuer to redeem the shares within 120 days of a Change of Control (where common shares are no longer exchange-listed) at $25.00 plus accrued distributions. A REIT qualification redemption right allows early redemption before 2018 if the shares threaten the issuer's REIT status — a risk relevant to REIT preferred investors since loss of REIT status could disrupt distributions entirely. At the $25.00 offering price, the effective yield is 6.375% annually, paid quarterly on or about January 15, April 15, July 15, and October 15. Because LaSalle is a REIT, dividends generally do not qualify for the preferential 15%/20% qualified dividend income (QDI) rate available for corporate dividends, nor for the dividends-received deduction (DRD) for corporate holders — they are typically taxed as ordinary income. The cumulative dividend stopper means no distributions on common shares may be paid while any Series I preferred distributions are in arrears, providing a structural protection for preferred holders.

Summarized from the SEC prospectus filing.

Distribution History

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

As a cumulative preferred, unpaid distributions accrue and must be paid in full before any distributions can be made to holders of common shares or other securities junior to the Series I Preferred Shares.

Other Preferreds from Pebblebrook Hotel Trust

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 45 (Average)