"The completion of this financing is the last step in our program to strengthen the finances and foundation of the company," says Ian Schrager, president of MHG. "With this behind us, we can now concentrate all of our energies on growing and further improving the business."

Sonnenblick-Goldman Co. arranged the refinancing on behalf of Morgans and its partner, NorthStar Capital Investment Group. The financing was co-provided by RBS Greenwich Capital, Credit Suisse First Boston and Blackacre Capital Management.

"The execution of this transaction further underscores the industry's continued belief in the long-term viability of the upscale boutique hotel sector," states Mark J. Gordon, managing director and principal of Sonnenblick-Goldman, who worked on the transaction with senior associate Svetlin Ganchev. "The uniqueness of the asset base, combined with the positive trending cash flow and the irreplaceable locations, further contributed to the strong interest by the lending communities."