LaSalle Hotel Properties closes $555 million senior term loan due 2021

By Marisa Wong

Morgantown, W.Va., Nov. 9 – LaSalle Hotel Properties entered into a $555 million senior unsecured term loan agreement on Thursday, according to an 8-K filing with the Securities and Exchange Commission.

Citigroup Global Markets Inc., BMO Capital Markets and U.S. Bank NA are joint lead arrangers and joint bookrunners with Citibank, NA as administrative agent and Bank of Montreal and U.S. Bank NA as co-syndication agents.

The term loan will mature on Jan. 29, 2021.

The term loan has an accordion feature that allows the company to request an increase in the total commitments of up to $700 million.

Borrowings bear interest at Libor plus 145 basis points to 220 bps, depending on the company’s leverage ratio. Based on the company’s current leverage ratio, the interest rate is Libor plus 145 bps.

The term loan was swapped to an average all-in fixed interest rate of 2.95%, the filing noted.

The credit agreement includes some financial covenants including a minimum fixed-charge coverage ratio of not less than 1.50 to 1.00; a minimum tangible net worth; a maximum leverage ratio of not greater than 6.50 to 1.00, with the ability to increase that ratio to 7:00 to 1:00; a maximum ratio of unsecured debt to total unencumbered asset value of not greater than 60%, with the ability to increase such ratio to 65%; a maximum secured leverage ratio of not greater than 45%; and a maximum secured recourse debt ratio of 10%.

Also on Nov. 5, the company entered into an amendment to its amended and restated senior unsecured credit agreement dated Jan. 8, 2014 and its senior unsecured term loan agreement dated Jan. 8, 2014.

These amendments conform provisions of the existing credit facilities to the provisions of the new term loan.

At closing, the company paid off its $177.5 million senior unsecured term loan. The company used the remaining proceeds to repay outstanding borrowings under its senior unsecured credit facility.

As of Monday, the company had $26 million outstanding on its senior unsecured credit facility.

The real estate investment trust is based in Bethesda, Md.

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