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RLJ increases loan by $100 million, gets $350 million new term loan
By Angela McDaniels
Tacoma, Wash., Sept. 3 - RLJ Lodging Trust refinanced about $565 million of debt with a new term loan, an add-on to an existing loan and a draw on its revolving credit facility, according to a company news release.
The company has a new $350 million five-year unsecured term loan. The interest rate is Libor plus 165 basis points to 240 bps depending on leverage.
The new term loan pricing grid is 5 bps lower than the company's prior term loan. The company said there are no other material term differences.
Based on the company's second-quarter leverage ratio and including the effects of an interest rate swap estimate, the new term loan's interest rate is about 285 bps lower than the 6.29% interest rate of the loans that were paid off.
The new term loan has a $50 million accordion feature.
The new term loan was arranged by Wells Fargo Securities, LLC and PNC Capital Markets LLC as lead arrangers and bookrunners.
The company exercised the entire $100 million accordion on its seven-year unsecured term loan due 2019, bringing the total borrowing under this loan to $225 million.
The interest rate on the term loan is Libor plus 205 bps to 300 bps depending on leverage.
Finally, the company drew $115 million from its revolver as temporary financing until it completes a pending secured financing transaction.
The proceeds were used to retire about $565 million of debt across eight loans that were secured by 51 assets.
The company expects its weighted average cost of debt to decrease by more than 70 bps, and it expects to realize at least $8 million of interest expense savings in 2014.
RLJ Lodging is a real estate investment trust based in Bethesda, Md., with a focused on acquiring hotels.
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