Pebblebrook Hotel Trust drops after pricing $350 mln convertible debt deal

Pebblebrook Hotel Trust's PEB.N shares down 4.8% at $11.01 premarket after it secures capital raise to refinance some debt

Hotel and resort REIT early Weds announces pricing private offering of $350 mln 1.625% convertible bonds (CBs) due 2030

Initial conversion price set at $15.89, 37.5% above stock's last sale of $11.56 on Tues

Co intends to use net offering proceeds and cash to repurchase approx $400 mln principal of its outstanding 1.75% CBs due 2026

It also entered into capped call transactions with purchasers of the CBs to help reduce potential dilution

The initial cap price of these transactions is $20.24, a 75% premium over stock's last close

Bethesda, Maryland-based PEB has ~$1.4 bln market cap, based on ~118.6 mln shares outstanding

Through Tues close, PEB shares fell ~15% YTD

Of 12 analysts covering PEB, recommendation breakdown is 2 "strong buy" or "buy", 8 "hold" and 2 "sell" ratings; median PT is $11, according to LSEG