RLJ Lodging Trust Successfully Secures Financial Covenant Waivers for Credit Agreements and Provides Update on Hotel Re-openi...
June 25 2020 - 9:00AM
Business Wire
RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today announced
that it has amended its $1.8 billion Senior Unsecured Credit
Facilities comprising a $600 million revolving credit facility
(“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.
Forward Looking
Statements
The following information contains certain statements, other
than purely historical information, including estimates,
projections, statements relating to the Company’s business plans,
objectives and expected operating results, measures being taken in
response to the COVID-19 pandemic, and the impact of the COVID-19
pandemic on our business, and the assumptions upon which those
statements are based, that are “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements generally are identified by the
use of the words “believe,” “project,” “expect,” “anticipate,”
“estimate,” “plan,” “may,” “will,” “will continue,” “intend,”
“should,” or similar expressions. Although the Company believes
that the expectations reflected in such forward-looking statements
are based upon reasonable assumptions, beliefs and expectations,
such forward-looking statements are not predictions of future
events or guarantees of future performance and the Company’s actual
results could differ materially from those set forth in the
forward-looking statements. Some factors that might cause such a
difference include the following: the current global economic
uncertainty and a worsening of global economic conditions or low
levels of economic growth; the duration and scope of the COVID-19
pandemic and its impact on the demand for travel and on levels of
consumer confidence; actions governments, businesses and
individuals take in response to the pandemic, including limiting or
banning travel; the impact of the COVID-19 pandemic and actions
taken in response to the pandemic on global and regional economies,
travel, and economic activity; the pace of recovery when the
COVID-19 pandemic subsides; the effects of steps we and our third
party management partners take to reduce operating costs; increased
direct competition, changes in government regulations or accounting
rules; changes in local, national and global real estate
conditions; declines in the lodging industry, including as a result
of the COVID-19 pandemic; seasonality of the lodging industry;
risks related to natural disasters, such as earthquakes and
hurricanes; hostilities, including future terrorist attacks or fear
of hostilities that affect travel; the Company’s ability to obtain
lines of credit or permanent financing on satisfactory terms;
changes in interest rates; access to capital through offerings of
the Company’s common and preferred shares of beneficial interest,
or debt; the Company’s ability to identify suitable acquisitions;
the Company’s ability to close on identified acquisitions and
integrate those businesses; and inaccuracies of the Company’s
accounting estimates. Given these uncertainties, undue reliance
should not be placed on such statements. Except as required by law,
the Company undertakes no obligation to update or revise publicly
any forward-looking statements, whether as a result of new
information, future events or otherwise. The Company cautions
investors not to place undue reliance on these forward-looking
statements and urge investors to carefully review the disclosures
the Company makes concerning risks and uncertainties in the
sections entitled “Risk Factors,” “Forward-Looking Statements,” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in the Company’s Annual Report, as well as
risks, uncertainties and other factors discussed in other documents
filed by the Company with the Securities and Exchange
Commission.
For additional information or to receive press
releases via email, please visit our website:
http://www.rljlodgingtrust.com
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200625005184/en/
Sean M. Mahoney, Executive Vice President and Chief Financial
Officer – (301) 280-7774
RLJ Lodging (NYSE:RLJ)
Historical Stock Chart
From Mar 2024 to Apr 2024
RLJ Lodging (NYSE:RLJ)
Historical Stock Chart
From Apr 2023 to Apr 2024