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Equity Inns Replaces, Increases Credit Line

GERMANTOWN, TN-The locally headquartered hotel REIT receives a $125-million line of credit from a syndicated group of banks co-led by J.P. Morgan and Calyon New York Branch. The facility has an accordion feature that can extend the borrowing capacity by 40%.

By Brian K. Miller | Updated on June 21, 2005

GERMANTOWN, TN-Equity Inns Inc. has obtained a new $125-million line of credit from a syndicated group of banks co-led by J.P. Morgan and Calyon New York Branch. The new facility replaces the company’s $110-million line of credit that was due to mature next June. The new facility bears a variable interest rate of Libor plus 1.62% to 3 % based on outstanding borrowings and leverage and matures in June 2008. The facility has a one-year extension option as well as an accordion feature that allows the company to extend the borrowing capacity to $175 million. Equity Inns chief executive Mitch Collins says he expects the improved pricing of the new facility will save the company about $500,000 in annual interest expense in addition to allowing it to continue funding future acquisitions. Earlier this week , Equity Inns announced the acquisition of 407 rooms in four Florida hotels. The hotels were acquired in two separate transactions totaling $46.2 million. The company paid McKibbon Hotel Group $30.3 million in cash and debt for three hotels comprised of 237 rooms and paid Orlando Convention Partners LP $12.3 million for a 170-room Hampton Inn in Orlando.Equity Inns focuses on the upscale extended stay, all-suite and mid-scale limited-service segments of the hotel industry. The company owns 117 hotels with 14,170 rooms located in 34 states.

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