New Issue: MeriStar upsized $155 million convertibles at 9.5% yield, up 100%

By Ronda Fears

Nashville, June 26 - MeriStar Hospitality Corp. sold an upsized $155 million of seven-year noncallable convertibles at par to yield 9.5% with a 100% initial conversion premium, via sole lead manager Lehman Brothers.

The overnighter, issued at the wide end of guidance, was boosted from $75 million.

The Washington, D.C.-based real estate investment trust, which owns upscale hotels and resorts, plans to use proceeds to redeem its 4.75% convertible due 2004.

Terms of the deal are:

Issuer: MeriStar Hospitality Corp.

Issue:	convertible subordinated notes
Lead manager:		Lehman Brothers
Amount	$155 million, upped from $75 million
Greenshoe:	$15 million
Maturity:	April 1, 2010
Dividend:	9.5%
Price:	par
Yield:	9.5%
Conversion premium:	100%
Conversion price:	$10.18
Conversion ratio:	98.2318
Call:	noncallable
Price Talk:	9.0-9.5, up 100%
Pricing Date:	June 25, after the close
Settlement:	July 1

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