Lodgian Provides Update on Maturing Mortgage Debt (États-Unis)
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Lodgian Provides Update on Maturing Mortgage Debt (États-Unis)
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Catégorie : Amérique du Nord et Antilles - États-Unis - Économie du secteur -
Chiffres et études
Ceci est un communiqué de presse sélectionné par notre comité éditorial et mis en ligne gratuitement le 03-07-2009
– Obtains extensions until 2010 and 2012 on two mortgage pools –
– Continues negotiations on third mortgage pool –
–Provides update on Holiday Inn Phoenix West property –
Lodgian, Inc. (NYSE Alternext US:LGN), one of the nation’s largest independent hotel owners and operators, today announced that the company has obtained extensions on $71.6 million of its mortgage indebtedness previously scheduled to mature on July 1, 2009, and remains in negotiations on extension of $45.7 million of mortgage debt which matured on July 1, 2009. The mortgage indebtedness, which was originated in June 2004 by Merrill Lynch and securitized in the collateralized mortgage-backed securities market, has been divided into three pools of indebtedness referred to by the company as the Merrill Lynch Fixed Rate Pools #1, #3 and #4. (The company repaid the Merrill Lynch Fixed Rate Pool #2 in 2007.) In summary, the company has reached agreements with the special servicers of this mortgage indebtedness to provide the following:
•An extension of the maturity date of the Merrill Lynch Fixed Rate Pool #1 to July 1, 2010; and
•An extension of the maturity date of the Merrill Lynch Fixed Rate Pool #4 to July 1, 2012.
A schedule of the principal balance for each of these loan pools, as of July 1, 2009, as well as a listing of the hotels that serve as collateral under these loan pools, is attached as an exhibit to this press release.
“We are extremely pleased with the extension agreements reached with regard to two of the three maturing loans, which extends the maturity date of $36.5 million and $35.1 million of mortgage debt for one and three years, respectively,” said Dan Ellis, Lodgian president and chief executive officer. “These extensions give Lodgian additional time and flexibility as the company continues its efforts to refinance this debt. We remain in negotiations with the special servicer of the Merrill Lynch Fixed Rate Pool #3 in an effort to arrive at a longer term solution for this loan portfolio.”
Extension of Merrill Lynch Fixed Rate Pool #1 to July 1, 2010
As of July 1, 2009, the principal amount of the Merrill Lynch Fixed Rate Pool #1 (“Pool #1”) was $36.5 million. The company and the special servicer for Pool #1 have agreed to two separate six-month extensions of the maturity date for this indebtedness. Assuming that the second six-month extension is exercised by the company, the maturity date of Pool #1 will be July 1, 2010. The interest rate on Pool #1 will remain fixed at 6.58% during the term of the extension. The company has paid the special servicer an extension fee of approximately $183,000 and will pay an additional extension fee of approximately $266,000 if the company chooses to exercise the second six month extension. Additionally, the company made a principal reduction payment of $2 million (reducing the principal balance of Pool #1 to $36.5 million as of July 1, 2009), and will make an additional $1 million principal reduction payment on or before December 30, 2009 if it exercises the second six month extension. The company also has agreed to make additional principal reduction payments of approximately $83,000 per month during the first six month extension and approximately $166,000 per month during the second six month extension, if exercised.
Extension of Merrill Lynch Fixed Rate Pool #4 to July 1, 2012
As of July 1, 2009, the principal amount of the Merrill Lynch Fixed Rate Pool #4 (“Pool #4”) was $35.1 million. The company and the special servicer for Pool #4 have agreed to extend the maturity date to July 1, 2012. The interest rate on Pool #4 will remain fixed at 6.58%. In connection with this agreement, the company paid an extension fee of approximately $175,000 and made a principal reduction payment of $500,000. The parties also have agreed to revise the allocated loan amounts for each property serving as collateral for Pool #4 and to allow partial prepayments of the indebtedness. Pursuant to this agreement, the company may release individual assets from Pool #4 by paying the lender specified amounts (in excess of the allocated loan amounts) in connection with a property sale or refinancing. The company also agreed to pay the lender an “exit fee” upon a full or partial repayment of the loan. The amount of this fee will increase each year but, assuming the loan is held for the full three year term, will effectively increase the current interest rate by 100 basis points per annum. The company also has issued a full recourse guaranty of Pool #4 in connection with this amendment.
Merrill Lynch Fixed Rate Pool #3
As of July 1, 2009, the principal amount of the Merrill Lynch Fixed Rate Pool #3 (“Pool #3”) was $45.7 million. The company and the special servicer are currently in negotiations concerning a long-term maturity extension for Pool #3; however, no agreement has been reached and the company can provide no assurances that the parties will reach such an agreement. The failure to pay the principal balance due upon maturity is an event of default, which gives the lender the right to institute foreclosure proceedings. In the event that the company is unable to achieve a long-term extension of Pool #3, the company expects that anticipated cash flow from the hotels securing Pool #3 may not be sufficient to meet the related debt service obligations and it may be necessary to transfer the properties securing this indebtedness to the lender in satisfaction of the company’s obligations.
Holiday Inn Phoenix West
On May 6, 2009, the company announced that its efforts to sell the Holiday Inn in Phoenix, Arizona have been unsuccessful and that the hotel’s operating performance was continuing to decline. The company has concluded that this hotel’s market value is less than the $9.4 million of mortgage indebtedness (unrelated to the Merrill Lynch Fixed Rate Pool indebtedness described above) which encumbers the property. Accordingly, the company ceased making mortgage payments on this indebtedness in May 2009 and began discussions with the lender to return the Holiday Inn property to the lender on a consensual basis. These discussions are ongoing. On June 17, 2009, the company received notice from its lender that the mortgage indebtedness on the Holiday Inn Phoenix West had been accelerated, as anticipated. This mortgage indebtedness is non-recourse to the company (except in certain limited circumstances which the company believes do not apply in this case) and is not cross-collateralized with any of the company’s other indebtedness. Since the company no longer intends to sell this hotel, this property no longer meets the criteria for classification as “held for sale.” As a result, the company will reclassify the property to “held for use” in its second quarter 2009 financial statements.
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