MeriStar Refis $300M CMBS Loan

MeriStar Hospitality Corp., Arlington, Va., has completed the refinancing of a 19-property, $300 million CMBS loan that it says will lower its interest rate by more than 300 basis points and result in various debt-related charges in the third quarter.The refinancing includes a defeasance of the existing loan and borrowings under two new facilities, using 18 properties that were included in the original collateral package, MeriStar said. The new borrowings consist of a $312 million, 17-property commercial mortgage-backed security loan at a rate of 135 bps above the London interbank offered rate (309 bps below the effective rate of the original loan) and a $15 million term loan covering one property at a rate of 350 bps over LIBOR, the company reported. MeriStar said it expects to record a $45.9 million loss on early extinguishment of debt related to the defeasance cost; an $8.7 million charge related to the termination of the interest rate swap on the original CMBS loan; and a noncash impairment charge of approximately $36 million related to four assets in the collateral package that the company expects to sell. MeriStar, a real estate investment trust, can be found online at http://www.meristar.com.