"The two are related in that we've taken steps to improve our financial flexibility," Richard J. O'Brien, FelCor's CFO and executive vice president, tells GlobeSt.com. The double score positions the Irving, TX-based REIT for the nation's long-awaited economic upswing and well into the post-recovery period. "There will be no significant maturities until October 2004," he adds.

JPMorgan Chase Bank, one of FelCor's Top Five lenders, has committed to a $150-million loan to pay off all outstanding debt on FelCor's credit line fueled by 10 lenders. In addition to JPMorgan Chase, the other Top Five are Deutsche Bank, Wells Fargo, CitiBank and Bank of America. The loan will close this month.

The savings will be felt in the interest rates. FelCor now is paying LIBOR plus 3.25%, which increases to 3.88% at the end of the second quarter, according to O'Brien. Under the new deal, it will be LIBOR plus 2.5% interest.

FelCor is putting up 10 full-service hotels, totaling 2,500 rooms with no attached debt, as the collateral. The 10-market package is securing a non-recourse, floating rate loan with an initial three-year term and options for two one-year extensions, subject to certain conditions.

O'Brien says FelCor's outstanding payment for the year is $10 million in recurring principal payments...and that's it. Meanwhile, the REIT has $150 million in cash in the coffer. And for now, the plan is to sit tight. "We are not focused on acquisitions," O'Brien emphasizes. "We are still taking a very cautious approach and the emphasis is capital preservation."

The $16-million refinancing retires an equal amount of debt due to mature in October. Nationwide Life Insurance Co., another existing FelCor lender, put together a five-year loan at a floating interest rate of LIBOR plus 2.85% interest, with no required amortization. In recent months, FelCor also retired a $6-million loan that would have matured in the second quarter.

The fiscal maneuvers for the nation's second-largest lodging REIT, O'Brien says, clearly show "the secured debt market continues to be an efficient market for hotel owners. Capital is available at a reasonable cost.