FelCor Lodging LP, Irving, Texas, has priced a $525 million senior secured notes offering at an interest rate of 6.75%. The notes will mature in 2019.
Proceeds from this offering (as well as $159 million raised in a common stock offering by parent company FelCor Lodging Trust Inc.) will be used to pay for the $140 million acquisition of two New York City hotels, The Royalton and Morgans, from Morgans Hotel Group Co.
Other proceeds will be used to redeem up to $144.5 million of outstanding 10% notes, repay borrowings under FelCor's line of credit (which had a balance of $145 million on March 31), retire the remaining $46 million of 9% notes that mature on June 1, repay other high interest rate mortgage debt and unencumber the hotels which are used as security, and to fund future acquisitions.
