LaSalle Hotel locks in $300 million five-year loan via Citi at 2.68%

By Susanna Moon

Chicago, Aug. 3 - LaSalle Hotel Properties said it closed a new $300 million five-year term loan with Citigroup Global Markets Inc. as lead arranger and bookrunner.

The term loan was swapped to a fixed interest rate for the full five-year term, according to a company press release and an 8-K filing with the Securities and Exchange Commission. Interest will be 2.68% when the company's leverage is between 4 and 4.75 times.

The company entered into a credit agreement Thursday with Citibank, NA as administrative agent and BBVA Compass and U.S. Bank NA as co-syndication agents.

Proceeds of $200 million were funded at closing, and the company may draw the remaining $100 million of proceeds during the next 95 days and expects to draw these funds toward the end of that period, the release noted.

The loan matures on Aug. 2, 2016 and includes a one-year extension option.

Covenants require the company to keep a maximum leverage ratio of no more than 6 times, a minimum fixed charge coverage ratio of at least 1.5 times, a maximum ratio of unsecured debt to total unencumbered asset value of no more than 60%, a maximum secured leverage ratio of no more than 45% and a minimum tangible net worth of at least the sum of (a) $1,333,261,000 plus (b) 75% of the total net proceeds from equity issuances after Sept. 30.

LaSalle, a Bethesda, Md.-based multi-operator real estate investment trust, owns upscale full-service hotels.

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