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RLJ REIT prices IPO at US$495m

BETHESDA, MARYLAND RLJ Lodging Trust expects to raise about US$495 million from its initial public offering today.

The REIT’s is selling 27.5 million common shares at US$18 per share. The offering is expected to close on May 16, and underwriters have a 30-day option to purchase an additional 4.1 million shares to cover overallotments, if any. The shares began trading today on the New York Stock Exchange under the symbol RLJ.

The company will use net proceeds of the offering to reduce outstanding indebtedness and to pay related transaction costs. The IPO will raise less than analysts had anticipated earlier this week, with reports of a target of US$664 million.

The IPO makes RLJ Lodging Trust one of the largest publicly traded hotel REITs. RLJ primarily concentrates on premium select-service brands in urban and dense suburban markets.

BofA Merrill Lynch, Barclays Capital and Wells Fargo Securities are acting as the joint book-running managers for the offering. Deutsche Bank Securities and Goldman, Sachs & Co. are acting as senior co-managers and KeyBanc Capital Markets, Raymond James and RBC Capital Markets are acting as co-managers.

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