ShoLodge starts exchange, consent solicitation for notes

New York, June 3 - ShoLodge, Inc. said it has begun an exchange offer for two series of outstanding notes.

The Hendersonville, Tenn. company is offering new notes with a slightly higher interest rate in exchange for the existing notes and looking to eliminate various provisions in the indenture of the existing notes.

ShoLodge is offering to exchange 10.15% senior subordinated notes series A-1 due November 2006 for its outstanding 9.75% senior subordinated notes series A due November 2006 and to exchange 9.75% senior subordinated notes series B-1 due September 2007 for its outstanding 9.55% senior subordinated notes series B due September 2007.

The change to the old note indenture will eliminate the annual put right of noteholders, removed the required redemption upon death of a noteholder and revise some restricted payment and net worth covenants.

Holders who tender the old notes for exchange will be deemed to have consented to the indenture amendments, ShoLodge said.

The company added that is not required to complete the exchange offers unless holders of at least 51% of both series of old notes in the aggregate agree to exchange their old notes and consent to the amendments.

Tenders of old notes in the exchange offer will be accepted on a first come, first served basis, and ShoLodge will only accept for exchange enough old notes to reach the required level of consents.

The exchange expires at 5:00 p.m. ET on June 30, unless extended.

Dealer manager is FTN Financial Securities Corp. (888 382-7766).

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