Interstate Hotels Receives Credit Facility Waiver
APRIL 1, 2009 - Interstate Hotels & Resorts (OTC: IHRI), a leading hotel real estate investor and the nation's largest independent management company, today announced that the company had received a waiver through June 30 related to the requirement under its senior credit facility to maintain listing on the New York Stock Exchange (NYSE). The NYSE suspended trading of Interstate's stock on March 12 after the company failed to meet the minimum $15 million market capitalization requirement. Trading of the company's stock has transitioned to the OTC market and the NYSE listing continues pending the appeal process.
"We appreciate the continued support from our bank group and have begun discussions regarding extending the facility's March 2010 maturity," said Bruce Riggins, chief financial officer. "Our goal is to have an amendment completed prior to June 30."
As part of the waiver agreement, the interest rate on the credit facility was increased 75 basis points to LIBOR plus 350 basis points. In addition, the company paid a 50 basis point fee to consenting lenders, and the facility size was permanently reduced to $173.3 million from $198.0 million. The new facility size provides for $10 million of borrowing capacity, of which $6 million is available through June 30, in addition to cash on hand. The company does not expect to draw on the facility during the waiver period.
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