RLJ LODGING TRUST (NYSE:RLJ) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement
On January25, 2018 (the “Amendment Effective Date”), RLJ Lodging Trust (the “Company”), as parent guarantor, and RLJ Lodging Trust, L.P. (the “Operating Partnership”), as borrower, entered into (i)a Second Amendment to Second Amended and Restated Credit Agreement (the “Second Amendment”) among the Company, the Operating Partnership, certain subsidiaries of the Company party thereto, Wells Fargo Bank, National Association, (“Wells Fargo”), as administrative agent and a lender, and the other lenders party thereto and (ii)a Sixth Amendment to Term Loan Agreement (the “Sixth Amendment,” and together with the Second Amendment, the “Amendments”) among the Company, the Operating Partnership, certain subsidiaries of the Company party thereto, Wells Fargo, as administrative agent and a lender, and the other lenders party thereto. The Second Amendment amends that certain Second Amended and Restated Credit Agreement, dated as of April22, 2016, among the Company, the Operating Partnership, Wells Fargo, as administrative agent and a lender, and the other lenders party thereto (as amended prior to the Amendment Effective Date, the “Credit Agreement”), which provides for (x)an up to $600 million revolving credit facility with a scheduled maturity date of April22, 2020, (y)a $400 million unsecured term loan with a scheduled maturity date of March20, 2019 (the “Tranche A-1 Term Loan”) and (z)a $400 million unsecured term loan with a scheduled maturity date of April22, 2021. The Sixth Amendment amends that certain Term Loan Agreement, dated as of November20, 2012, among the Company, the Operating Partnership, Wells Fargo, as administrative agent and a lender, and the other lenders party thereto (as amended prior to the Amendment Effective Date, the “Term Loan Agreement”), which provides for a $225 million unsecured term loan with a scheduled maturity date of November20, 2019 (the “$225M Term Loan,” and together with the Tranche A-1 Term Loan, the “Recast Term Loans”).
The Amendments provide, among other things, for:
· the scheduled maturity date of each of the Recast Term Loans to be extended to January25, 2023; and
· the interest rate applicable to outstanding amounts under each of the Recast Term Loans to be reduced to, subject to certain exceptions, a per annum rate, at the Operating Partnership’s election, of (a)LIBOR plus a margin ranging from 145 to 220 basis points (in lieu of (i)in the case of Tranche A-1 Term Loan, the previous range of 155 to 230 basis points and (ii)in the case of the $225M Term Loan, the previous range of 205 to 300 basis points) or (b)a base rate plus a margin ranging from 45 to 120 basis points (in lieu of (i)in the case of Tranche A-1 Term Loan, the previous range of 55 to 130 basis points and (ii)in the case of the $225M Term Loan, the previous range of 105 to 200 basis points), in each case, with the margin depending on the total leverage ratio of the Company and its subsidiaries.
The Amendments also provide that, in the event that the Company’s or the Operating Partnership’s long-term senior unsecured non-credit enhanced debt receives an investment grade credit rating, following the Operating Partnership’s election, outstanding amounts under each of the Recast Term Loans will bear interest, subject to certain exceptions, at a per annum rate, at the Operating Partnership’s election, of (a)LIBOR plus a margin ranging from 90 to 175 basis points or (b)a base rate plus a margin ranging from 0 to 75 basis points, in each case, with the margin determined according to such credit rating then in effect.
Except as amended by the Second Amendment, the remaining terms of the Credit Agreement remain in full force and effect, and, except as amended by the Sixth Amendment, the remaining terms of the Term Loan Agreement remain in full force and effect. The foregoing summary of the Amendments does not purport to be complete is qualified in its entirety by reference to the Second Amendment and the Sixth Amendment, copies of which are attached as Exhibits 10.1 and 10.2 hereto, respectively, and incorporated herein by reference.
Item 1.01. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information set forth above under Item 1.01 of this Current Report on Form8-K regarding the amendments to the Company’s credit facilities is incorporated into this Item 1.01 by reference.
Item 1.01. Other Events
On the Amendment Effective Date, the Company, as parent guarantor, and the Operating Partnership, as borrower, also entered into an amendment in respect of the Term Loan Agreement, dated as of December22, 2014 (as amended prior to the Amendment Effective Date, the “Capital One Term Loan Agreement”), by and among the Company, the Operating Partnership, Capital One, National Association, as administrative agent and a lender, and the other lenders party thereto, which provides for a $150 million unsecured term loan with a scheduled maturity date of January22, 2022 (the “$150M Term Loan”). Among other things, the amendment to the Capital One Term Loan Agreement reduces the interest rate applicable to outstanding amounts under the $150M Term Loan to a per annum rate equal to the rate described above in respect of the Recast Term Loans.
Item 1.01. Financial Statements and Exhibits
(a)Not applicable.
