MeriStar issues stock in exchange for $18 million 8¾% notes

New York, Sept. 22 - MeriStar Hospitality Corp. said it issued 2.79 million shares of common stock in exchange for $18.0 million face amount of its 8¾% senior subordinated noted due 2007.

The Arlington, Va. hotel owner said it acquired the notes at an average price of 90.6% of face value.

Along with the repurchase of $22.6 million of the notes with proceeds from the company's recent convertible offering, MeriStar has reduced the outstanding amount of the 8¾% notes to $164.5 million.

"The exchange of senior subordinated notes prior to maturity allows us to reduce our debt levels, and is part of our continual effort to strengthen our balance sheet," said Donald D. Olinger, chief financial officer, in a news release. "Since the end of 2002, we have substantially improved our liquidity, reduced our debt levels and refinanced our 2004 debt maturity. We now have no significant maturities prior to the maturity of the senior subordinated notes in 2007."

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