Hotel REIT Takes $150M Unsecured Term Loan Facility
Publicly traded REIT RLJ Lodging refinanced outstanding CMBS debt to the tune of $150 million, the firm announced yesterday. The new unsecured term loan facility allows RLJ to resolve any questions about refinancing next year, when interest rates will likely be higher and a slew of loans will be due, potentially stretching lenders’ limits—the anticipated so-called “wall of maturities.”
“With the completion of this transaction, we will address all of our 2015 debt maturities,” Thomas Baltimore Jr., president and CEO of the firm, said in a statement. “Our ability to secure a seven-year term loan reaffirms the confidence that our financial partners have in the company. Furthermore, our balance sheet is in an excellent position to pursue additional growth opportunities.”
The loan, which was jointly arranged by Capital One and PNC Real Estate, has a floating interest rate of Libor plus 180 to 260 basis points, according to the statement.
The loan will not fund immediately, but will instead become available next year when the pre-payment windows for the current CMBS loans open. The loan should be fully drawn by the second quarter of 2015. The loan also has an option for the borrower to take an additional $100 million, the statement said.
RLJ Lodging owns 144 hotels in 21 states.
The next tranche of debt the REIT holds will not mature until 2017.