Morgans Hotel Issues Trust Securities

Morgans Hotel Group Co., a New York-based hospitality company that operates boutique hotels in gateway cities, has announced the issuance of $50 million in trust preferred securities in a private placement.The securities, issued through a newly established trust subsidiary, MHG Capital Trust I, have a 30-year maturity and are redeemable after five years at par. They bear interest at a fixed rate of 8.68% until October 2016, and thereafter at a floating rate of 3.25% over the London interbank offered rate. Net proceeds from the issuance will be used to pay down the company's credit line and provide financing for development and other corporate activities. The company can be found online at http://www.morganshotelgroup.com.