RLJ Lodging Trust completes $700 million unsecured credit facility

By Sara Rosenberg

New York, Nov. 26 - RLJ Lodging Trust closed on a $700 million unsecured credit facility, according to a news release.

The facility consists of a $300 million revolver and $400 million in five-year and a seven-year term loans.

There is a $500 million accordion feature.

Proceeds were used to repay about $70 million of revolver debt and retire about $330 million of secured mortgage loans.

The interest rates for the term loans are based on a pricing grid tied to leverage. At closing, the company's third-quarter leverage ratio resulted in blended term loan pricing that was more than 300 basis points lower than the 5.8% weighted average interest rate of the four mortgage loans that were paid off.

Meanwhile, the new revolver has improved financial covenants, a later maturity date and a reduction of about 65 bps on average across the pricing grid when compared to the prior revolver.

Wells Fargo Securities LLC and Bank of America Merrill Lynch were the lead arrangers on the revolver and five-year term loan, and Wells Fargo and PNC Capital Markets LLC were the lead arrangers on the seven-year term loan.

"These transactions strengthen our balance sheet and demonstrate our commitment to maintain a conservative capital structure," said Thomas J. Baltimore Jr., president and chief executive officer, in the release.

"By adding unsecured debt to our capital structure, we were able to take our first significant step towards becoming investment grade," Baltimore added.

RLJ Lodging Trust is a Bethesda, Md.-based self-advised real estate investment trust focused on acquiring premium-branded, focused service and compact full-service hotels.

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