BETHESDA, Md.--(BUSINESS WIRE)--RLJ Lodging Trust (NYSE: RLJ) today announced that it has amended its $1.8 billion Senior Unsecured Credit Facilities comprising a $600 million revolving credit facility and $1,175 million in term loans.
“We are pleased with the amendments to our credit facility, which in addition to providing relief from covenant tests for an extended period of time, also provide us the flexibility on multiple fronts to continue to pursue our strategic initiatives,” commented Leslie D. Hale, President and Chief Executive Officer. “We thank our lending partners for their support as we continue to navigate these uncertain times and truly value these strong, long-term relationships. Additionally, we are pleased with the progress we are making towards re-opening hotels in a socially and financially responsible manner.”
Amended Credit Facility Terms
Key terms of the Amended Credit Facilities include the following:
- Waiver of quarterly financial covenants beginning in the second quarter of 2020 through the first quarter of 2021, unless terminated earlier by the Company.
- After the end of the covenant relief period, certain covenant calculations are modified to make compliance easier through the second quarter of 2022.
- Imposition of certain restrictions during the covenant relief period including restrictions on share repurchases, dividends and distribution payments (with certain exceptions, including for the payment of a cash dividend of $0.01 per common share, the payment of a cash dividend of $0.4875 per share on the Company’s Series A Cumulative Convertible Preferred Shares and other payments for purposes of maintaining the Company’s REIT status).
- Addition of limitations on the incurrence of additional indebtedness, asset sales, investments and discretionary capital expenditures, in each case subject to various exceptions and requiring certain mandatory repayments.
- The Company is permitted to make investments during the covenant relief period, including $200 million of hotel acquisitions, depending on the outstanding balance on the Revolving Credit Facility, and approximately $260 million of capital expenditures.
Update on Hotel Re-openings
Concurrent with its first quarter earnings release, the Company had announced suspension of operations at 57 hotels in response to state mandated stay-in-place orders and the significant reduction in demand due to the COVID-19 pandemic. As stay-in-place restrictions are lifted, the Company has developed a framework to open hotels in a socially and financially responsible way. The Company expects that its primarily transient oriented, select-service and extended stay hotels located in drive-to and leisure markets will re-open sooner than traditional full-service hotels. The Company has recently reopened 19 hotels and continues to evaluate reopening additional hotels based on market conditions. All open hotels will continue to operate under aggressive operating cost containment plans, including significantly reduced staffing, elimination of non-essential amenities and services, and the closure of several floors and most food and beverage outlets.
About Us
RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio consists of 103 hotels with approximately 22,570 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.
