Interstate Hotels & Resorts $135 million credit facility to launch late next week

By Sara Rosenberg

New York, Aug. 4 - Interstate Hotels & Resorts is scheduled to hold a bank meeting for its approximately $135 million credit facility at the end of next week, according to a company spokesman. Societe Generale is the lead bank on the deal.

The facility consists of an approximately $60 million revolver and an approximately $75 million term loan, the spokesman said.

Proceeds will be used to refinance the existing senior secured credit facility and subordinated term loan.

"We are continuing our discussions to refinance our senior bank credit facility, which should allow us to replace our current facility and subordinated debt with a new expanded facility with a lower cost of debt. This new facility will provide the company with approximately $50 million of undrawn capacity and will help us capitalize on our business expansion plan. Although we had hoped to complete this facility during the first quarter 2004 we intentionally delayed this effort to pursue a different strategic opportunity," company officials said during a conference call Wednesday.

"We were engaged in merger discussions during the months of March through May of this year that would have allowed us to acquire a company with a significant portfolio of hotels. However, these discussions were terminated when we mutually determined that the transaction would not be consummated. While these discussions were in progress, we were required to set aside our efforts on our new credit facility and our opportunity fund. As of the first of June, we have resumed both in earnest. Relative to our new credit facility we are moving forward," officials added in the call.

The Interstate Hotel Investors Fund is a proprietary investment fund that is expected to acquire about $500 million to $600 million in hotel real estate over the next 12 to 18 months.

As of June 30, total debt was $90 million, consisting of $46.3 million of senior debt, $40 million of subordinated debt and a $3.7 million non-recourse promissory note. And, the average cost of debt was 7.65%.

The refinancing is expected to be completed by the end of the third quarter.

Interstate Hotels & Resorts is an Arlington, Va., hotel management company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.