J.P. Morgan andBear Stearns are leading an $895 million facility for Wyndham International that will refinance existing debt and extend maturities. The loan consists of a six-year, $175 million revolver; a six-year, $50 million letter of credit facility; a six-year, $530 million first-lien "B" term loan; and a six-and-a-half year, $140 million second-lien "C" loan. Wyndham is also raising approximately $944 million through the commercial mortgage-backed securities market that will be completed by the end of the second quarter.
Moody's Investors Service assigned a B3 rating to the first lien bank debt. It assigned a Caa1 rating to the "C" loan. Over the past four years the company has restructured its operations through significant asset sales and debt reduction. Two weeks ago the company closed the sale of 23 hotels to a private investment fund managed by Goldman Sachs and affiliates of Highgate Holdings and two more properties will be sold within the next several months. But according to Moody's, the credit metrics remain weak. Adjusted leverage after the refinancing will be over nine times and coverage will be under 1.5 times. A spokeswoman did not return calls.