Lodging Company Lands $900 Mln. Deal

  • 15 Jul 2001
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Extended Stay of America is set to close a $900 million credit facility by the end of July, replacing an existing $1 billion deal. Gregory Moxley, cfo, says the company chose to split the new financing between the credit facility and by issuing $300 million in senior subordinated notes. "This balances out our capital structure and gives us more fixed-rate debt," he explained.

Morgan Stanley is the lead on the new credit and led the former deal. FleetBoston Financial and Bear Stearns are co-leads. The company did go out to bid, but opted to stick with its original lender. "They knew our business, our needs, and were able to align those with what the market could absorb. Plus they had the ability to execute," said Moxley. The deal breaks down between a $200 million revolver, a $200 million tranche "A," and a $500 million tranche "B." Pricing on the revolver and term loan "A" is LIBOR plus 21/ 4% and LIBOR plus 23/ 4% on the "B." Moody's Investors Service gave the credit a Ba3 rating. Morgan Stanley also leads the bond offering. "We knew we wanted to do both [bank and bond deals] if the market was right. It turns out the bond market, if not at the bottom, is near the bottom," Moxley said, explaining pricing was favorable at issuance.

ESA, based in Fort Lauderdale, Fla., provides apartment-style accommodations in a hotel atmosphere. The financing goes toward construction of new hotel properties.

  • 15 Jul 2001

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 7,026 25 11.95
2 Citi 6,449 21 10.96
3 BNP Paribas 5,093 18 8.66
4 Barclays 4,040 11 6.87
5 Lloyds Bank 3,615 14 6.15

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3 Wells Fargo Securities 86,271.10 256 9.44%
4 JPMorgan 67,323.36 205 7.37%
5 Credit Suisse 49,265.86 144 5.39%