Extended Stay talks $500 million 10-year senior notes to yield 5 3/8%; pricing Friday

By Paul Deckelman

New York, April 30 – Price talk on Extended Stay America, Inc.’s $500 million offering of 10-year senior notes (expected ratings B3/BB-) was set at 5 3/8%, high-yield syndicate sources said Thursday.

Books are scheduled to close at the end of the day, with pricing expected Friday morning.

Deutsche Bank Securities Inc. is the left bookrunner for the Rule 144A and Regulation S for life offering. Citigroup Global Markets Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC, Barclays and Credit Suisse Securities (USA) LLC are the joint bookrunners. Lebenthal is the co-manager.

The notes come with five years of call protection and feature a three year 35% equity clawback and a 101% poison put.

The issuing entity is subsidiary ESH Hospitality, Inc.

The Charlotte, N.C.-based owner and operator of company-branded hotels plans to use the proceeds to repay mortgage debt.

Paul A. Harris contributed to this story

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