FelCor Lodging amends notes for debt flexibility

FelCor Lodging amends notes to expand debt flexibility for subsidiary

• On 10:50 am EDT, Monday October 12, 2009

IRVING, Texas (AP) -- FelCor Lodging Trust Inc. said Monday it is amending a series of corporate notes to provide a subsidiary more flexibility to incur debt.

The real estate investment trust has received approval from note holders to amend the 10 percent senior secured notes due 2014, enabling FelCor Lodging LP debt flexibility.

The amendment was expected to become effective Monday.

Last month, the company said it planned to raise $530 million in new debt using proceed to pay obligations coming due in 2011.

The FelCor Lodging LP was to offer senior secured notes to qualified institutional buyers.

Analysts at Moody's Investors Services assigned a B2 non-investment grade rating to new senior notes issued by the company and downgraded other ratings on Sept. 17.

The corporate family rating was lowered to B3 from B2. The analysts also downgraded the ratings of FelCor's outstanding senior unsecured notes to B3 from B2, as well as the ratings of its preferred stock to Caa3 from Caa2. The rating outlook remained negative.

All the ratings are non-investment grade or "junk."

FelCor owns 87 hotels and resorts in 23 states and Canada. Its revenue comes from hotel operations. Most of its properties are managed by other companies, including Hilton Hotels Corp., Marriott International Inc., Starwood Hotels & Resorts Worldwide Inc. and InterContinental Hotels Group.

The hotel sector is suffering as corporate travel budgets shrink. FelCor has said it has worked to cut costs until the lodging sector stabilizes, which isn't expected before next year.

Shares rose 11 cents, or 2.3 percent, to $4.56 in morning trading. They've traded between 66 cents and $5.31 in the past year.

Buzz up!