Morgans Hotel Group Co. (NASDAQ: MHGC) (“MHG” or the “Company”) announced it has closed a new $100 million senior secured revolving credit facility with additional borrowing capacity up to $110 million. The Company intends to utilize the facility to fund growth.
Michael Gross, Chief Executive Officer of MHG said, “Over the past several months, we have made tremendous strides in positioning ourselves to grow and increase shareholder value. This credit facility will provide capital to help expand our brands to deliver exceptional experiences for our guests in key markets in the U.S. and around the world.”
Borrowings under the facility are subject to a borrowing base test and upon closing, the Company’s availability is the full $100 million. The interest rate is LIBOR plus 4.0%, subject to a LIBOR floor of 1.0%. The facility matures in three years and is secured by Delano in South Beach. The credit facility contains standard financial covenants, including a minimum fixed charge coverage ratio of 1.05x in the first year and 1.10x thereafter.
Deutsche Bank Securities Inc. and affiliates are acting as the Lead Arranger and Administrative Agent for the facility and Aareal Capital Corporation, Citibank, N.A. and MidFirst Bank are also lenders.
About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ: MHGC) is widely credited as the creator of the first “boutique” hotel and a continuing leader of the hotel industry’s boutique sector. Morgans Hotel Group operates Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles, South Beach and New York, Clift in San Francisco, Ames in Boston, Sanderson and St Martins Lane in London, and a hotel in Playa del Carmen, Mexico. Morgans also owns, or has ownership interests in, several of these hotels. Morgans Hotel Group has other property transactions in various stages of completion including a Delano in Cabo San Lucas, Mexico, a Delano in Turkey, a Mondrian in Doha, Qatar and a hotel in New York to be branded with one of MHG’s existing brands. For more information please visit www.morganshotelgroup.com.
Forward-Looking and Cautionary Statements
This press release may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, the operating performance of our investments and financing needs and prediction of certain future other events. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “expect,” “anticipate,” “estimate” “believe,” “project,” or other similar words or expressions. These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results or other future events to differ materially from those expressed in any forward-looking statement. Important risks and factors that could cause our actual results to differ materially from those expressed in any forward-looking statements include, but are not limited to economic, business, competitive market and regulatory conditions such as: a sustained downturn in economic and market conditions, particularly levels of spending in the business, travel and leisure industries; continued tightness in the global credit markets; general volatility of the capital markets and our ability to access the capital markets; our ability to refinance our current outstanding debt and to repay outstanding debt as such debt matures; our ability to protect the value of our name, image and brands and our intellectual property; risks related to natural disasters, such as earthquakes, volcanoes and hurricanes; hostilities, including future terrorist attacks, or fear of hostilities that affect travel; and other risk factors discussed in Morgans’ Annual Report on Form 10-K for the fiscal year ended December 31, 2010, and other documents filed by Morgans with the Securities and Exchange Commission from time to time. All forward-looking statements in this press release are made as of the date hereof, based upon information known to management as of the date hereof, and Morgans assumes no obligations to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.
Tagged with: Business • Business Expansion • Business Services • Chief executive officer • Common stock • Credit Facility • Economy • Financial • Forward-looking statement • Industry • Markets • Morgans Hotel Group • Morgans Hotel Group Co. • NASDAQ: MHGC • New York • New York City • NYSE • Preferred stock • Private Securities Litigation Reform Act • Revolving credit • ROI • SEC • Stock Dividend
Filed under: Business
Like this post? Subscribe to my RSS feed and get loads more!