Interstate Hotels & Resorts Extends Senior Credit Facility to March 2012
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Interstate Hotels & Resorts Extends Senior Credit Facility to March 2012
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Category: Worldwide - Industry economy -
Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2009-07-15
Interstate Hotels & Resorts (OTC: IHRI), a leading hotel real estate investor and the nation’s largest independent management company, today announced that it has extended the maturity of its senior credit facility to March 2012 by converting the facility’s outstanding balance of $161.2 million to a new term loan. The agreement also provides the company with an $8 million revolving credit line. The revised facility carries an interest rate of LIBOR plus 550 bps, with a 2.0 percent LIBOR floor plus additional PIK interest (payment-in-kind) of 2.0 percent through March 2011 and 3.0 percent thereafter. The accrued PIK interest is payable at maturity.
Terms of the credit facility require amortization of $20.0 million by March 9, 2010 and an additional $20.0 million by March 9, 2011. Amortization is expected to come from a combination of a non-recourse mortgage on currently unencumbered assets (up to $20.0 million), asset sales and cash flow. The financial covenants were restructured to replace the four existing covenants with two new covenants.
Banc of America Securities LLC was sole lead arranger and sole book runner and Bank of America, N.A. is the administrative agent.
“Bank of America did a tremendous job leading this credit facility amendment, and we really appreciate the continued support of all 10 of our credit facility lenders,” said Bruce Riggins, chief financial officer. “This credit facility extension provides us much greater flexibility to execute our business plan through the current recession and positions us to emerge a stronger company as the industry recovers. We expect to be in compliance with all financial covenants for 2009.”
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