New Issue: RFS Partnership $125 million 10-year notes yield 9¾%

By Paul A. Harris

St. Louis, Mo., Feb. 21 - RFS Parntership, LP priced $125 million of senior notes due March 1, 2012 (B1/B+) on Thursday, according to a syndicate source. The notes priced at par to yield 9 ¾%.

"It definitely priced on the tight end of the (9¾%-10%) price talk," a syndicate source commented. "On the prospectus they had pro-forma-ed a rate of 10½%, so obviously there was a lot of interest in order for them to have been able to price at the tight end."

Credit Suisse First Boston and Banc of America Securities were joint bookrunners. Co-managers were CIBC World Markets, Morgan Keegan and PNC Capital Markets.

The Memphis, Tenn.-based REIT announced it will use the proceeds from the 144A offering to redeem its commercial mortgage notes and to repay bank debt.

Co-issuers:	RFS Partnership, LP, RFS 2002 Financing, Inc.
Amount:	$125 million
Maturity:	March 1, 2012
Type:	Senior notes
Bookrunners:	Credit Suisse First Boston, Banc of America Securities
Coupon:	9¾%
Price:	Par
Yield:	9¾%
Spread:	486 basis point over 4.875% Treasury due Feb. 15, 2012
Call features:	Callable with a make-whole provision at Treasuries plus 50 basis points prior to March 1, 2007; Callable after March 1, 2007 at 104.875, 103.250, 101.625, par on March 1, 2010 and thereafter
Equity clawback:	Until March 1, 2005 at 109.75 for up to 35%, provided that $100 million principal amount of the notes remains outstanding.
Settlement date:	Feb 26 (T+3)
Ratings:	Moody's: B1
	Standard & Poor's: B+
Rule 144A Cusip:	74956MAA8

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