FelCor obtains $200 million credit facility

By Sara Rosenberg

New York, June 20 - FelCor Lodging Trust Inc. obtained a new $200 million secured delayed-draw credit facility. JPMorgan Chase Bank is the lead bank on the deal.

Furthermore, the company has reduced its unsecured line of credit commitments to $50 million, and is in the process of amending its covenant levels. The line of credit has an accordion feature that allows for an increase in commitments to $200 million subject to lender consent and satisfaction of certain conditions. Interest on this undrawn loan is Libor plus 387.5 basis points.

Interest on the new facility can range from Libor plus 225 basis points to Libor plus 275 basis points depending on the loan-to-value ratio of the facility.

The facility has an initial term of 18 months that can be extended for an additional six months at the company's option.

Outstanding balances on the facility will be converted generally into 10-year fixed rate commercial mortgage backed securities loans through JPMorgan. The CMBS loans are assumable subject to certain conditions and will bear a market interest rate. On Friday, the market rate was approximately 5.5%.

"During these uncertain times, we are focused on maintaining FelCor's financial flexibility. The secured debt facility strengthens our financial flexibility and provides a take-out for the $175 million of senior notes that mature in October 2004, while downsizing our more expensive unsecured line," said Richard J. O'Brien, chief financial officer and executive vice president, in a news release.

FelCor is an Irving, Tex. hotel real estate investment trust.

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