Prime Hospitality receives consents to amend 8 3/8% notes

New York, Sept. 22 - Prime Hospitality Corp. said it received the necessary consents to amend its 8 3/8% senior subordinated notes due 2012 as part of its tender offer for the securities.

As of 5 p.m. ET on Sept. 22, Prime had tenders and consents from holders of $172.6 million principal amount of the notes, or 96.6%.

Prime said it will execute a supplemental indenture with the amendments but it will not become effective until immediately before its acquisition by The Blackstone Group.

The tender offer and consent solicitation are being conducted in connection with Prime Hospitality's previously announced agreement to be acquired by an affiliate of Blackstone.

As announced on Sept. 9, for each $1,000 principal amount of notes, Prime Hospitality will pay the present value as of the tender payment date of $1,041.88, the earliest redemption price for the notes, and the interest that would accrue from the payment date up to but not including the earliest redemption date of May 1, 2007. The calculation will be based on 50 basis points over the yield to maturity of the 4 3/8% U.S. Treasury note due May 15, 2007 at 2 p.m. ET on the 10th business day before the tender expires.

Holders will also receive accrued interest up to but excluding the payment date.

The total includes a consent payment of $30.00 per $1,000 principal amount which will only be paid to holders who tender before the consent expiration date of 5 p.m. ET on Sept. 22.

The tender expires at 8 a.m. ET on Oct. 8.

Holders who tender will be required to consent to the amendments and vice versa.

Prime Hospitality, a Fairfield, N.J. firm, said the consent solicitation is to eliminate substantially all of the restrictive covenants and certain events of default, amend the merger and consolidation covenant and make changes to the defeasance provisions.

The tender is subject to various conditions including the receipt of enough consents to amend the notes and the acquisition being completed or occurring concurrent with completion of the tender.

Banc of America Securities LLC (888 292-0070 and 704 388-9217) and Bear, Stearns & Co. Inc. (877 696-BEAR) are dealer managers and solicitation agents. D.F. King & Co. Inc. (212 269-5550 for banks and brokers and 800 628-8532 for all others) is the information agent.

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