Interstate Hotels seeks loan waiver, plans to seek maturity extension in second quarter

By Sara Rosenberg

New York, March 12 - Interstate Hotels & Resorts Inc. is looking to get a waiver under its credit facility through June 30 and will then try to extend the maturity date of the deal, company officials said in a conference call on Thursday.

The waiver, about which the company is already in active discussions with lenders, would cover defaults resulting from the suspension of trading of its stock on the New York Stock Exchange and a potential "going concern" audit opinion that would be issued in the absence of information in support of the ability of the company to comply with its debt covenants.

As part of the waiver, the company expects a modest increase in pricing and has offered to reduce its borrowing ability, officials said in the call.

After completing the waiver, Interstate Hotels then plans to focus on extending its credit facility beyond the current March 2010 maturity date.

The company plans to go back to lenders in the second quarter with a plan for this extension.

In connection with the extension, the company anticipates reducing the facility size, higher pricing, paying upfront fees and revising covenants, officials added in the call.

Interstate Hotels is an Arlington, Va.-based hotel management company.

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