Merrill Lynch Mortgage Lending Inc. is providing Lodgian with a$309 million credit facility. During its protection period, Lodgianwas operating its hotels largely from a $25 million loan by a NewYork-based lender group led by Morgan Stanley and Lehman BrothersInc.

"With our new financing and significantly reduced leverage,Lodgian is well-positioned to benefit from an economic recovery andis committed to increasing shareholder value, going forward,"company president/CEO David E. Hawthorne says in a preparedstatement.

Seventy-nine Lodgian subsidiaries are out of Chapter 11; 18remain under protection. The company plans to sell nine hotels bythe end of first quarter 2003.

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