Strategic Hotels gets $300 million three-year replacement revolver

By Susanna Moon

Chicago, July 1 - Strategic Hotels & Resorts, Inc. said it closed a $300 million three-year secured revolving credit facility with an initial interest rate of Libor plus 300 basis points. The spread will be Libor plus 275 bps to 375 bps.

The facility has a $100 million accordion and a one-year extension option.

The new agreement replaces the company's $350 million revolver set to mature in March 2012. The initial rate reflects a cut from the previous rate of Libor plus 375 bps, according to a company press release.

"Over the past 18 months, we have methodically and proactively addressed the various aspects of our balance sheet, significantly reducing our leverage and providing long-term liquidity," Diane Morefield, chief financial officer of Strategic Hotels, said in the release.

"Establishing this new line of credit is a vital component of our overall balance sheet restructuring strategy, as it provides favorable pricing and terms along with flexible corporate borrowing capacity into 2015."

Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are joint bookrunners and joint lead arrangers for the facility. Citibank, NA and Wells Fargo Bank, NA are co-documentation agents. Aareal Capital Corp., Bank of America, NA, Morgan Stanley Senior Funding, Inc. and PrivateBank and Trust Co. are senior managing agents. Sumitomo Mitsui Banking Corp. and Raymond James Bank, FSB are additional lenders.

Strategic is a Chicago-based real estate investment trust.

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