Morgan Stanley this Friday will launch syndication of a $900 million credit for Fort Lauderdale, Fla.-based Extended Stay America, Inc. The credit comprises a $200 million revolver, a $50 million funded "A1"term loan, an unfunded $150 million "A2," and a $500 million "B" term loan. Extended Stay is also planning $300 million in bond issuance. The credit and notes are part of a refinancing of the existing $998 million bank debt, set to mature in 2002. The company, which provides extended stay lodging, had approximately $200 million available under the old credit.
Pricing is set at LIBOR plus 2 1/4 % on the pro rata and LIBOR plus 2 3/4 % on the "B" tranche. The pro rata has a six-year maturity and the "B" seven and a half years. Extended has senior leverage of 2x, commented a banker, considered very low, and a large group participated in the last deal. Industrial Bank of Japan and Morgan Stanley led the previous loan, according to Capital DATA Loanware. Officials at Extended did not return calls.