MeriStar exchanges stock for 8¾% notes

New York, Dec. 23 - MeriStar Hospitality Corp. (Caa1/CCC+) said that it had reduced the outstanding balance on its 8¾% senior subordinated notes due 2007 by $25.7 million through exchanges of its common stock totaling 4.7 million shares.

MeriStar, an Arlington, Va.-based lodging company, said that since the beginning of 2003, it has eliminated all significant maturities prior to the senior subordinated notes due in 2007 and has reduced the outstanding balance of the 8¾% notes by $126 million to $79 million currently.

CapStar Hotel Co. originally issued $150 million of the notes in August 1997, which were later assumed by MeriStar, CapStar's corporate successor. MeriStar issued an additional $55 million of the notes in March 1999, bringing the total amount issued to $205 million before subsequent reductions.

The company said it was continuing to review opportunities to improve its balance sheet.

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