UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 27, 2018

APPLE HOSPITALITY REIT, INC.

(Exact name of registrant as specified in its charter)

(804) 344-8121

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company     ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      ☐

Apple Hospitality REIT, Inc. (which is referred to below as the “Company”) is filing this report in accordance with Items 1.01, 2.03, and 9.01 of Form 8-K.

Item 1.01.  Entry into a Material Definitive Agreement.

On July 27, 2018, the Company, as borrower, and certain of its subsidiaries, as guarantors, entered into an amendment and restatement of its then existing $965 million credit facility with Bank of America, N.A., as administrative agent, and the lenders party thereto (the “Credit Agreement”). The Credit Agreement provides for a term loan of $200 million with a maturity date of July 27, 2023, a term loan of $225 million with a maturity date of January 31, 2024 and a revolving credit facility of $425 million with an initial maturity date of July 27, 2022. Subject to certain conditions including covenant compliance and additional fees, the revolving credit facility maturity date may be extended up to one year and the amount of the total credit facility may be increased from $850 million to $1.25 billion. 

The terms of the Credit Agreement are generally similar to the Company’s previous $965 million credit agreement. The amendments include: the interest rate decreased slightly and, subject to certain exceptions, is equal to the LIBOR (London Inter-Bank Offered Rate) plus a margin ranging from 1.35% to 2.25%, depending upon the Company’s leverage ratio, as calculated under the terms of the Credit Agreement; the unused fee was reduced to a per annum fee of 0.20% or 0.25% (depending on the usage) of the daily amount of the unused portion of the revolving credit facility; and the total facility was reduced from $965 million to $850 million.

At closing, the Company borrowed $425 million under the term loans and, repaid the $425 million outstanding under the term loans of the previous credit facility and borrowed $196 million under the revolving credit facility to repay the outstanding balance of the previous credit facility and to pay closing costs.

Similar to the previous credit agreement, the Credit Agreement contains customary mandatory prepayment requirements, affirmative covenants, negative covenants and events of default, which, following any applicable grace period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of the Company under the Credit Agreement to be immediately due and payable.  The Credit Agreement requires the Company and its subsidiaries to comply with various covenants, including covenants restricting liens, indebtedness, investments, mergers and asset sales. Certain of the financial maintenance covenants in the Credit Agreement include:

      The foregoing summary does not purport to be a complete statement of the terms and conditions under the Credit Agreement, and is qualified in its entirety by the full terms and conditions of the Credit Agreement which is filed as Exhibit 10.1 to this current report on Form 8-K and incorporated herein by reference.

Item 2.03.  Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.  

The information set forth under Item 1.01 of this report is hereby incorporated by reference into this Item 2.03.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.