Host Marriott gets bridge loan commitment, but plans asset sale proceeds for Starwood asset buy

By Sara Rosenberg

New York, Nov. 14 - Host Marriott Corp. has received a commitment for a bridge loan from Goldman Sachs and Deutsche Bank to back the cash portion of the financing for the acquisition of 38 luxury and upper upscale hotels from Starwood Hotels and Resorts, company officials said in a conference call Monday.

However, the company hopes to avoid tapping the bridge loan as it plans to fund the cash portion of the transaction with proceeds from asset sales and the spinning out of European assets into joint ventures, officials added in the call.

Under the acquisition agreement, Host Marriott will purchase the hotel assets for $4.04 billion, including the assumption of about $700 million in debt. Host Marriott plans to issue $2.3 billion of equity for acquisition financing in addition to raising the about $1 billion in cash.

The transaction is expected to close in the first quarter of 2006 and is subject to the approval of the stockholders, as well as other closing conditions.

After closing on the acquisition, Host Marriott plans to change its name to Host Hotels & Resorts.

Host Marriott is a Bethesda, Md.-based lodging real estate company.

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