BETHESDA, MD—RLJ Lodging Trust has successfully refinanced more than $1 billion of debt consisting of a $400 million unsecured term loan, a $400 million revolving credit facility, $148.5 million in secured loans provided by Wells Fargo Bank, N.A., and an $85 million secured loan provided by PNC Bank, N.A.
“RLJ has one of strongest balance sheets among publicly traded lodging REITs,” said Tom Baltimore, president and CEO, who will be leaving the company next month to become president/CEO of Hilton Worldwide’s planned hotel REIT, as reported by Hotel Business. “Year-to-date, we have successfully refinanced more than a billion dollars of near-term maturities and demonstrated our commitment to bolstering and maintaining a best-in-class balance sheet.”
The newly amended and restated 2013 five-year term loan and revolver reduced interest rates across the pricing grid by an average of 21 and 26 basis points, respectively, enhanced financial covenants, and extended final maturities to 2021 (including applicable extensions). The company also strengthened its liquidity by increasing the capacity on its revolver from $300 million to $400 million.
Additionally, the company proactively addressed its near-term secured debt maturities, further staggering its debt and enhancing its balance sheet. Three Wells Fargo loans secured by four properties totaling $148.5 million were amended and restated to extend the final maturity to 2022 (including extensions) and improve pricing by 15 basis points. Similarly, the PNC loan, which is secured by five properties, was recast to extend the maturity to 2023 (including extensions) and improve pricing by 25 basis points. The PNC loan was also upsized from $74 million to $85 million, capitalizing on the improved performance of its underlying assets.
“With the execution of these transactions, we have eliminated all of our near-term debt maturities,” said Leslie Hale, EVP and CFO. “These deals highlight our relentless effort to maintain a fortress balance sheet with well-laddered maturities and low leverage, as well as a significant pool of unencumbered assets.”
Extending our maturities and upsizing the revolver and the PNC loan have provided the company with additional flexibility and liquidity to pursue its overall strategic objectives, according to RLJ. Including all extension options, the next tranche of debt will mature in March 2019.