Print Page  Close Window

SEC Filings

10-K
RLJ LODGING TRUST filed this Form 10-K on 03/01/2019
Entire Document
 << Previous Page | Next Page >>

Our interest rate risk objectives are to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, we manage our exposure to fluctuations in market interest rates through the use of fixed rate debt instruments to the extent that reasonably favorable rates are obtainable. We have entered into derivative financial instruments such as interest rate swaps to mitigate our interest rate risk or to effectively lock the interest rate on a portion of our variable rate debt. We do not enter into derivative or interest rate transactions for speculative purposes.
 
The following table provides information about our financial instruments that are sensitive to changes in interest rates. For debt obligations outstanding as of December 31, 2018, the following table presents the principal repayments and related weighted-average interest rates by contractual maturity dates (in thousands):
 
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
 
Total
Fixed rate debt (1)
$
2,967

 
$
3,361

 
$
3,557

 
$
140,386

 
$

 
$
475,000

 
$
625,271

Weighted-average interest rate
5.01
%
 
5.01
%
 
5.01
%
 
5.01
%
 
%
 
6.00
%
 
5.76
%
Variable rate debt (1)
$
290,250

 
$

 
$
485,000

 
$
150,000

 
$
625,000

 
$

 
$
1,550,250

Weighted-average interest rate (2)
4.07
%
 
%
 
3.37
%
 
3.08
%
 
3.30
%
 
%
 
3.44
%
Total (3)
$
293,217

 
$
3,361

 
$
488,557

 
$
290,386

 
$
625,000

 
$
475,000

 
$
2,175,521


(1)
Excludes $5.8 million and $0.4 million of net deferred financing costs on the Term Loans and mortgage loans, respectively.
(2)
The weighted-average interest rate gives effect to interest rate swaps, as applicable.
(3)
Excludes a total of $33.4 million related to fair value adjustments on debt.
 
Our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during future periods, prevailing interest rates, and our hedging strategies at that time.
 
Changes in market interest rates on our fixed rate debt impact the fair value of our debt, but such changes have no impact to our consolidated financial statements.  As of December 31, 2018, the estimated fair value of our fixed rate debt was $646.0 million, which is based on having the same debt service requirements that could have been borrowed at the date presented, at prevailing current market interest rates. If interest rates were to rise by 1.00%, or 100 basis points, and our fixed rate debt balance remains constant, we expect the fair value of our debt to decrease by approximately $31.0 million.

Item 8.    Financial Statements and Supplementary Data

Refer to the Index to Financial Statements on page F-1.

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

None.


59

 << Previous Page | Next Page >>