By Paul A. Harris
Portland, Ore., March 11 – Extended Stay America, Inc. and its subsidiary ESH Hospitality, Inc. priced an upsized $800 million add-on their 5¼% senior notes due May 1, 2025 (B3/BB-) at 98.5 to yield 5.46% on Friday, according to a market source.
The add-on was upsized from $500 million.
The reoffer price came at the cheap end of the 98.5 to 99 price talk but on top of the initial guidance.
Joint bookrunner J.P. Morgan Securities LLC will bill and deliver. Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman Sachs & Co., Barclays, BofA Merrill Lynch, Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC and Macquarie Capital were also joint bookrunners.
The Charlotte, N.C.-based lodging real estate investment trust plans to use the proceeds, together with cash on hand, to repay its term loan and a portion of its mortgage loan.
The original $500 million issue price on May 1, 2015.
The new notes will become fungible with the original notes.
| Issuer: | Extended Stay America, Inc.
|
| Face amount: | $800 million, increased from $500 million
|
| Maturity: | May 1, 2025
|
| Security description: | Add-on to 5¼% senior notes due May 1, 2025
|
| Bookrunners: | J.P. Morgan Securities LLC (bill and deliver), Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman Sachs & Co., Barclays, BofA Merrill Lynch, Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, Macquarie Capital
|
| Co-manager: | Blackstone
|
| Coupon: | 5¼%
|
| Price: | 98.5
|
| Yield: | 5.46%
|
| Spread: | 350 bps
|
| First call: | May 1, 2020 at 102.625
|
| Trade date: | March 11
|
| Settlement date: | March 18 with accrued interest
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: BB-
|
| Distribution: | Rule 144A and Regulation S
|
| Price talk: | 98.5 to 99
|
| Marketing: | Quick to market
|
| Original issue: | $500 million issue priced at par on May 1, 2015
|
| Fungibility: | Add-on notes will become fungible with the original notes
|
| Total issue size: | $1.3 billion
|
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