By Paul Deckelman
New York, May 1 – Extended Stay America, Inc.’s $500 million offering of 10-year senior notes (expected ratings B3/BB-) priced to yield 5¼%, junk bond market sources said Friday.
That compares with the price talk of 5 3/8% that circulated in the market on Thursday.
More detailed deal terms were not immediately available at press time on Friday morning.
The offering priced after a short roadshow that began earlier in the week.
Deutsche Bank Securities Inc. was the left bookrunner for the Rule 144A and Regulation S for life offering. Citigroup Global Markets Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC, Barclays and Credit Suisse Securities (USA) LLC were the joint bookrunners.
The notes come with five years of call protection and feature a three year 35% equity clawback and a 101% poison put.
The issuing entity is subsidiary ESH Hospitality, Inc.
The Charlotte, N.C.-based owner and operator of company-branded hotels plans to use the proceeds to repay mortgage debt.
| Issuer: | ESH Hospitality, Inc. (Extended Stay America, Inc.)
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| Amount: | $500 million
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| Maturity: | 10 years
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| Securities: | Senior notes
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| Left bookrunner: | Deutsche Bank Securities Inc.
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| Joint bookrunners: | Citigroup Global Markets Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC, Barclays, Credit Suisse Securities (USA) LLC
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| Co-manager: | Lebenthal & Co., LLC
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| Yield: | 5¼%
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| Call: | Non-callable for five years
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| Equity clawback: | 35% for three years
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| Change-of-control put: | 101%
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| Announcement date: | May 1
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 5 3/8%
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