FelCor Lodging amends credit facility, revising covenant levels

By Sara Rosenberg

New York, June 25 - FelCor Lodging Trust Inc. amended its $615 million credit facility, modifying covenant levels to obtain greater financial and operating flexibility, according to a company press release. JPMorgan Chase Bank and Deutsche Bank Trust Company Americas co-led the deal.

The facility matures in November 2004 with the option to extend for up to two additional one-year terms. Interest rates will remain the same and continue to be based on the leverage ratio. Based on the Irving, Tex. hotel real estate investment trusts' present leverage ratio, the facility has an interest rate of about 5%, the release said. There are currently no balances outstanding.

"We are extremely pleased to close on the amended credit facility. The amended line, together with our excess cash position, provides us with a great deal of financial flexibility. We are appreciative of the continued strong support from our lender group," said Richard J. O'Brien, executive vice president and chief financial officer, in the news release.

Following the downturn in the economy in 2001 and the events of Sept. 11, the company went through the process of amending its credit facility with the expectation that another amendment would be needed at a later time, O'Brien told Prospect News.

Although earnings visibility in the lodging industry has improved, it is still fairly weak and since there is currently strength in the lending markets, it was a good time for FelCor to complete the newest amendment, O'Brien added.

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