Innkeepers USA Amends Revolving Unsecured Line of Credit
PALM BEACH, FL, September 26, 2006. Innkeepers USA Trust (NYSE: KPA), a hotel real estate investment trust (REIT) and a leading owner of upscale properties throughout the United States, today announced that it successfully amended its existing $135 million revolving unsecured line of credit. The amended credit facility capacity has been increased to $205 million, and the maturity was extended from July 2007 to September 2008. In addition, the interest rate was reduced to a range of 115 to 175 basis points over LIBOR from 140 to 225 basis points, and, subject to certain conditions, the company has the ability to increase the facility to $275 million.
Participating lenders for the amended unsecured line of credit include Wells Fargo Bank, National Association, as administrative agent and sole lead arranger; Wachovia Bank, National Association, and Calyon New York Branch, as co-syndication agents; and PNC Bank, National Association, as documentation agent.
"This amended and expanded credit facility gives us significant flexibility and provides us with sufficient capacity, and at a reduced cost, to execute our strategic business plans, including the selective acquisition and development of hotels," said Jeffrey H. Fisher, Innkeepers USA's chief executive officer and president.
Concurrently, the company closed on a $75 million financing package involving three loans, including a term loan at a 10-year fixed rate of 6.03 percent that bears interest only for three years and thereafter will amortize over a 30-year period. The net proceeds were used to pay down the outstanding balance under the amended revolving line of credit. Merrill Lynch Mortgage Lending, Inc. was the lead arranger for the new facility.
"This is our first financing with Merrill Lynch, and we look forward to building on our relationship with this significant source of capital," said Dennis Craven, Innkeepers USA's chief financial officer. "The new term loan reduces the average interest rate on our fixed-rate debt by 50 basis points to 7.3 percent and extends our weighted average maturity date to 5.4 years from 3.7 years."