- Proceeds to Refinance Remainder of Outstanding Mezzanine Debt -
- Lowers Cost of Debt and Maintains Financial Flexibility –
CHARLOTTE, N.C.--(BUSINESS WIRE)--
Extended Stay America, Inc. (NYSE:STAY) (the “Company”) today announced
that its subsidiary, ESH Hospitality, Inc., priced a $375 million Senior
Secured Term Loan (the “Term Loan”) at LIBOR plus 4.25%, with a minimum
LIBOR of 0.75%, with a five year term, and offered at 99.5. The
financing is expected to close on June 23, 2014, subject to the
execution of definitive documentation and customary closing conditions.
The proceeds of the Term Loan will be used to refinance the existing
outstanding $365 million of 9.4% mezzanine debt and pay related
transaction fees and expenses.
“The new Term Loan allows us to reduce our cash interest expense by
approximately $16 million annually, lowers our average cost of debt to
under 4%, and, with a one year non-call period, provides us our desired
flexibility to deleverage over time” stated Peter Crage, Chief Financial
The Term Loan was arranged by Goldman Sachs Bank USA, Citigroup Global
Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities
Forward Looking Statements
This press release contains forward-looking statements within the
meaning of the federal securities laws. Statements related to, among
other things, the consummation of the Term Loan and potential changes in
market conditions constitute forward-looking statements. For a
description of factors that may cause the Company’s actual results,
performance or expectations to differ from any forward-looking
statements, please review the information under the heading “Risk
Factors” included in the Company’s combined annual report on Form 10-K
filed with the SEC on March 20, 2014 and other documents of the Company
on file with or furnished to the SEC. Any forward-looking statements
made in this press release are qualified by these cautionary statements,
and there can be no assurance that the actual results or developments
anticipated by the Company will be realized or, even if substantially
realized, that they will have the expected consequences to, or effects
on, the Company or its business or operations. Except as required by
law, the Company undertakes no obligation to update publicly or revise
any forward-looking statement, whether as a result of new information,
future developments or otherwise. We caution you that actual outcomes
and results may differ materially from what is expressed, implied or
forecasted by the Company’s forward-looking statements.
About Extended Stay America
Extended Stay America, Inc., the largest owner/operator of
company-branded hotels in North America, owns and operates 684 hotels in
the U.S. and Canada comprising approximately 76,200 rooms and employs
approximately 10,000 employees in its hotel properties and headquarters.
The Company owns and operates hotels under the core brand Extended Stay
America®, which serves the mid-priced extended stay segment, and other
brands. Visit www.extendedstay.com
for more information about the Company and its services.
Extended Stay America, Inc.
Source: Extended Stay America, Inc.