Extended Stay to commence bond tender offers, repay bank debt as part of buyout

By Sara Rosenberg

New York, March 8 - Extended Stay America Inc. plans to solicit consents and commence tender offers for its existing senior subordinated notes due in 2008 and 2011 and also repay all of its bank debt in connection with The Blackstone Group's acquisition of the company, management said during a company conference call on Monday.

Blackstone has secured financing commitments in the amount of $2.662 billion from Bear Stearns and Bank of America to help support the transaction. This financing will be raised through the commercial mortgage-backed securities market, according to a market source.

"They were able to raise more leverage through the mortgage-backed market than the bank market," the source explained.

Under the transaction agreement, Blackstone will acquire Extended Stay for $19.625 per share. The total value of the transaction, including debt, is more than $3.1 billion. The transaction is subject to shareholder approval and other customary conditions and is expected to be completed during the second quarter 2004.

Extended Stay is a Spartanburg, S.C., developer, owner and operator of extended-stay lodging facilities.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.