FelCor obtains $150 million term loan commitment

By Sara Rosenberg

New York, April 7 - FelCor Lodging Trust Inc. received a commitment for a $150 million secured term loan with an interest rate of Libor plus 250 basis points from JPMorgan Chase Bank. The loan will be sold into the commercial mortgage-backed security market, according to Richard J. O'Brien, chief financial officer and executive vice president.

The loan has an initial term of three years and can be extended for two additional, one-year periods subject to certain conditions.

Security for the loan is 10-full service hotels.

The loan, which is expected to close in April, be used to fully repay the company's current outstanding borrowings under its line of credit. Currently, the rate on the existing line of credit is Libor plus 325 basis points and since it is a tiered structure, the rate could step up to Libor plus 388 basis points headed into the second quarter, O'Brien told Prospect News on Monday.

"The uncertain economy continues to significantly impact the lodging industry and the effects of the Iraq war remain to be seen. During these uncertain times, we are focused on maintaining FelCor's financial flexibility. The loan will allow us to pay off our line of credit at a lower interest cost and to continue to carry $150 million of cash," O'Brien said in a news release.

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

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