RLJ Lodging plans amendment to extend covenant relief period

By Sara Rosenberg

New York, June 10 – RLJ Lodging Trust LP is amending its credit facilities to extend a covenant relief period by one fiscal quarter so that no testing will be required through and including the fiscal quarter ending March 31, 2022, according to a market source.

In addition, following the extended covenant relief period, the amendment will extend the period of less restrictive thresholds for the leverage ratio and the unencumbered debt service coverage ratio, and provide new less restrictive thresholds for the unencumbered leverage ratio.

During the leverage relief period, the minimum liquidity level required will be increased to $150 million from $125 million.

Wells Fargo Bank is the administrative agent on the credit facilities.

The amendment will become effective on the issue date of the company’s $500 million senior secured notes offering, which was upsized from $400 million.

The company expects to use proceeds from the notes to repay some borrowings under its term loan due 2022, term loan due 2023 and term loan A-1 due 2023, to repay secured mortgage debt due in 2022 and for general corporate purposes.

RLJ Lodging is a Bethesda, Md.-based real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels.

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