The Irving-based FelCor has earmarked the standby funds to buyMeriStar's existing 9% senior notes, due in 2008, or its 9 1/8%note that mature in 2001. Deutsche Banc Alex. Brown Inc. and J.P.Morgan Securities Inc. have arranged the $500-millioncommitment.

Thomas J. Corcoran Jr., FelCor's president and CEO, says themerger is on track and the loan facility is one more step towardmeeting a third quarter closing on the transaction. Shareholders ofboth firms have yet to vote on the takeover of the Washington,DC-based MeriStar, which had been announced in early May.

The deal calls for FelCor to put up $240 million in cash and thebalance in stock. FelCor also will assume $1.6 billion of MeriStardebt. Under the takeover, FelCor will swap $4.60 and 0.784 of ashare for each MeriStar share.

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