Pebblebrook Hotel Trust Announces Exercise In Full of Underwriters’ Over-Allotment Option and Subsequent Closing of 1.75% Convertible Senior Notes Due 2026

Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) today announced that it has closed its previously announced underwritten public offering of $250,000,000 aggregate principal amount of its 1.75% Convertible Senior Notes due 2026 (the “Notes”), including $35,000,000 aggregate principal amount of Notes sold pursuant to the exercise in full of the underwriters’ over-allotment option to purchase additional Notes. The Notes have terms identical to the $500,000,000 aggregate principal amount of 1.75% Convertible Senior Notes due 2026 issued by the Company on December 15, 2020 (the “Initial Notes”) and are of the same series as the Initial Notes. The Notes have the same CUSIP number and are expected to trade interchangeably with the Initial Notes.

“With the successful completion of this Notes offering, we now have approximately $790 million of liquidity,” noted Raymond D Martz, Chief Financial Officer for Pebblebrook Hotel Trust. “Also, we’ve strengthened our balance sheet through this offering of convertible notes and improved our debt maturity schedule by allowing for the paydown of approximately $177 million of our 2021 and 2022 debt maturities. This enhances our ability to take advantage of investment opportunities in 2021 and beyond. We appreciate the strong support by the noteholders who participated in this offering.”

The Notes are the Company's senior unsecured obligations and rank equally with all of its existing and future unsecured debt that is not subordinated, senior to any future subordinated debt and junior to all existing and future debt and preferred equity of the Company’s subsidiaries. The Notes pay interest semiannually at a rate of 1.75% per annum and will mature on December 15, 2026. The Notes have an initial conversion rate of 39.2549 per $1,000 principal amount of the Notes (equivalent to a conversion price of approximately $25.47 per common share of the Company (“Common Shares”) and a conversion premium of approximately 35.0% based on the closing price of $18.87 per Common Share on December 10, 2020). The initial conversion rate of the Notes is subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest. Prior to June 15, 2026, the Notes are convertible only upon certain circumstances and during certain periods, and thereafter will be convertible at any time prior to the close of business on the second scheduled trading day prior to maturity of the Notes. Upon conversion, holders will receive cash, Common Shares or a combination thereof at the Company's election.