FelCor Lodging Trust Incorporated (NYSE: FCH) today announced the closing of the offer and sale of $525 million aggregate principal amount of 5.625% senior secured notes due 2023. This financing enables FelCor to benefit from historically low interest rates, mitigate future market risk, create a long-term and staggered maturity profile, and significantly reduce its cost of borrowing. After giving effect to the offering and associated debt repayment, annual interest expense will decline approximately $20 million, which equates to $0.16 of additional funds from operations (“FFO”) per share. FelCor will use the proceeds from the offering to:
- Redeem $258 million in aggregate face amount of 10% senior notes due 2014;
- Repay a $187 million mortgage loan that bears interest at 8.1%;
- Pay $55 million of prepayment costs, underwriting fees and other expenses; and
- Repay $25 million of the outstanding amount on its line of credit.
- Average debt maturity extended to 2021;
- Weighted average cost of borrowing reduced to below 6%, significantly lower than FelCor’s historical levels; and
- Run-rate consolidated interest expense reduced to approximately $75-$80 million, or more than $50 million below 2011.
About FelCor:FelCor, a real estate investment trust, owns 67 primarily upper-upscale, full-service hotels that are located in major and resort markets throughout 22 states. FelCor partners with leading hotel companies to operate its diversified portfolio of hotels, which are flagged under globally recognized names such as, Doubletree®, Embassy Suites®, Fairmont®, Hilton®, Marriott®, Renaissance®, Sheraton®, Westin® and Holiday Inn®, and premier independent hotels in New York. Additional information can be found on the Company's Web site at www.felcor.com.