Extended Stay of America's bank debt is reportedly trading at 100 3/8 to 101 out of the box on appetite for a strong credit, say dealers. Dealers said the credit was riding high off a strong syndication, but there was no consensus on whether it would hold at its lofty levels. The Florida-based company provides apartment-style accommodations in a hotel atmosphere to business travelers. Greg Moxley, cfo, declined to comment.
"They have good asset coverage, strong results, and strong management," one dealer said, discounting any affect on the credit from a weaker hotel industry. "The clientele is not high-end resort people. These are people who need to stay somewhere for a while for business." Another dealer said there's been little chatter about the credit and says the bank he works for considered getting involved, but stepped back because of problems in the hotel industry. "It's something we looked at but didn't do, because we didn't want exposure to the lodging industry," he said.
ESA signed a $900 million deal with Morgan Stanley in July. The deal breaks down between a $200 million revolver, a $200 million term loan "A," and a $500 million "B" tranche. Pricing on the revolver and "A" tranche is LIBOR plus 21/ 4% and LIBOR plus 23/ 4% on the "B".