MeriStar to redeem remaining $106 million of 10½% notes

By Angela McDaniels

Seattle, March 2 -MeriStar Hospitality Operating Partnership LP will redeem the remaining $105.894 million principal amount of its 10½% senior notes due 2009 on March 27, according to an 8-K report filed with the Securities and Exchange Commission on Thursday.

The company will pay $1,052.50 per $1,000 principal amount plus accrued interest for a total redemption cost of $114,603,782.

The redemption will be funded with proceeds from the Feb. 24 sale of nine hotels and a golf and tennis club to BRE/Florida Portfolio LLC, an affiliate of The Blackstone Group, for $367.1 million.

MeriStar announced its intention to use the proceeds to reduce debt on Feb. 1 and redeemed $100 million of the notes on Feb. 3.

The asset sale was a precursor to MeriStar's upcoming acquisition by an affiliate of The Blackstone Group in a transaction valued at about $2.6 billion.

The 10½% notes, MeriStar's most expensive debt, become callable in December.

MeriStar is a subsidiary of MeriStar Hospitality Corp., which is a Bethesda, Md.-based real estate investment trust specializing in hotel properties.

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