RLJ Lodging unit FelCor calls $524 million 5 5/8% notes at 102.813

By Susanna Moon

Chicago, Feb. 27 – RLJ Lodging Trust announced the redemption of subsidiary FelCor Lodging LP’s $524 million principal amount of 5 5/8% senior secured notes due 2023.

The notes will be redeemed on March 9 at a redemption price of 102.813% of par plus accrued interest to but excluding the redemption date, according to a company announcement.

The company said it expects to fund the redemption using cash on hand and borrowings under its previously undrawn $600 million revolving credit facility.

“The early redemption of our senior notes reflects our commitment to deleveraging our balance sheet and maintaining our target net debt to EBITDA ratio of 4 times or less over time,” Leslie D. Hale, chief operating officer and chief financial officer, said in the company’s press release.

“By redeeming these notes, we will strengthen our balance sheet by lowering our weighted average cost of debt and unencumbering nine assets. We are confident in our disposition pipeline and remain committed to utilizing proceeds from these asset sales to deleverage our balance sheet.”

As announced, FelCor received tenders of $990,000 of notes in its change-of-control offer for the 5 5/8% notes that ended at 9 a.m. ET on Oct. 19.

FelCor offered to repurchase the notes at 101% in connection with the merger between a wholly owned subsidiary of RLJ Lodging Trust, LP and FelCor, with FelCor surviving as a wholly owned subsidiary of RLJ LP.

RLJ and FelCor are real estate investment trusts based in Bethesda, Md., and Irving, Texas, respectively, which own hotels.

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