Host Hotels calls $225 million 7 1/8% notes, might repurchase up to $175 million of additional debt

By Angela McDaniels

Tacoma, Wash., July 27 - Host Hotels & Resorts, Inc. said it will redeem $225 million principal amount of its 7 1/8% series K senior notes under a $400 million repurchase authorization granted by the board of directors in February.

The 7 1/8% notes will be redeemed Aug. 25. There is $725 million principal amount of the notes currently outstanding, according to the company's 10-Q report for the quarter ended June 18 filed with the Securities and Exchange Commission.

The board authorized the company to repurchase up to $400 million of senior notes, exchangeable debentures and mortgage debt. The redemption of the 7 1/8% notes will reduce this amount to $175 million.

The company said it may purchase notes for cash through open-market purchases, privately negotiated transactions, a tender offer or, in some cases, through early redemption.

Repurchases will depend on prevailing market conditions, the company's liquidity requirements, contractual restrictions and other factors.

The company noted that as a real estate investment trust, it depends primarily on external sources of capital to fund near-term debt maturities. If, at any time, it determines that market conditions are favorable, it may seek to sell shares of common stock or preferred stock or seek to have Host Hotels & Resorts, LP issue debentures exchangeable for shares of common stock or senior notes.

The company said that because a portion of its debt matures every year, it will continue to redeem or refinance notes and mortgage debt over time.

Bethesda, Md.-based Host Hotels is a real estate investment trust that owns and operates hotel properties.

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