RLJ Lodging Trust recently entered into a new credit agreement, replacing a previous one. The new $500 million unsecured term loan matures on September 24, 2027, with extension options available. This loan allowed them to repay an existing $400 million loan and $100 million of a revolving credit facility, which is also part of the agreement, along with another $225 million term loan from before. They can also increase total borrowing limits and are allowed to use $30 million for issuing letters of credit. Interest rates vary based on leverage ratio or credit ratings.
The company's obligations depend on maintaining certain financial ratios, like indebtedness to EBITDA. If leverage exceeds allowed levels, the interest rate increases. There's also an unused commitment fee on the revolving credit facility. With a high enough credit rating, the company could benefit from lower interest rates. Lending conditions include restrictions related to the company's actions, like asset sales and mergers.
The funds will go towards various corporate needs, such as hotel redevelopment, acquisitions, debt repayment, and working capital. The terms include guarantees from subsidiaries and could change if the company achieves an investment-grade credit rating.
Proper names mentioned: - RLJ Lodging Trust - Wells Fargo Bank, National Association - RLJ Lodging Trust, L.P. - Capital One, N.A.