RLJ Lodging Trust Strengthens Balance Sheet
Tuesday September 3rd, 2013 - 9:43AM S
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BETHESDA, MD—RLJ Lodging Trust has refinanced approximately $565 million of debt, further strengthening its balance sheet and increasing its liquidity.
The company used proceeds from a new $350-million, five-year unsecured term loan, a $100-million expansion of its seven-year unsecured term loan, and a $115-million draw from its existing credit facility. As a result of this transaction, RLJ Lodging Trust expects to realize significant interest expense savings in 2014 of at least $8 million.
“We have completed yet another significant milestone in our efforts to become investment grade," stated Thomas J. Baltimore Jr., president and CEO. “This transaction enhances our flexibility for future growth and will provide us with meaningful cash flow savings. We will continue to be prudent and disciplined managers of our balance sheet.”
Proceeds from the two term loans and the company’s existing credit facility were used to retire approximately $565 million of debt across eight loans that were secured by 51 assets. Upon retiring these loans, RLJ Lodging Trust increased its total unencumbered pool of assets from 63 to 114. The company’s unencumbered hotels now make up approximately 76% of the total portfolio’s 2012 pro forma hotel EBITDA.
Tags: • Hospitality • Sources of Funding •
When you hear all the lodging industry projections for the months and years to come, much of the robust growth is forecast to be the result of the expected influx of travelers from China. In what could only be seen as good news for the industry, that expectation moved a little closer to reality when President Obama signed a visa waiver extension for Chinese travelers earlier this month.