Morgans Hotel In Deal With Hudson Hotel Lender

NEW YORK (AP) — Morgans Hotel Group Co. said Thursday that it reached a deal with one of its lenders to lower the outstanding balance on the Hudson Hotel's mezzanine loan.

The balance now sits at $26.5 million, down from its previous $32.5 million.

The agreement also gives the boutique hotel operator more leeway on the loan, which was to mature on July 12, 2010. The unnamed lender has agreed to hold off until Oct. 12, 2013 before taking action on any maturity default, subject only to maintaining certain interest rate caps and making cash payments within the control of Morgans.

The lender is also backing Morgans' attempt to get Hudson's $217 million mortgage loan extended. The loan is also set to mature on July 12, 2010.

Shares of Morgans Hotel Group added 24 cents, or 4.4 percent, to $5.75 in morning trading. Over the past year, the stock has traded in a range of $1.57 to $6.50.