MHI Hospitality Corp. redeems some preferred stock

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Williamsburg-based MHI Hospitality Corp. has agreed to redeem more than 1,900 shares of its Series A cumulative redeemable preferred stock for a total price of $2.1 million plus the payment of accrued and unpaid cash and stock dividends.

The company also has amended an $8 million mortgage secured by its Doubletree by Hilton Brownstone-University hotel with its lender, Premier Bank Inc.

The amended loan’s principal amount was increased to $10 million. The mortgage’s interest rate will remain at 5.25 percent, and the loan was changed to remove any prepayment penalty.

Proceeds from the loan amendment were used to redeem a portion of the company’s preferred stock. The combined transaction results in a normalized annual interest expense savings of approximately $115,000 to the company.

MHI Hospitality Corporation is a lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper upscale full-service hotels in the mid-Atlantic and Southern United States. Currently, the company’s portfolio consists of investments in 10 hotel properties, nine of which are wholly-owned and include 2,113 rooms.

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