The loan has an interest rate of 325 basis points over Libor and includes an $8.2-million holdback fund for the previously announced renovations at Embassy Suites hotels, totaling 563 rooms, in Phoenix, Flagstaff, AZ and Syracuse, NY and Doubletree Guest Suites, with 332 rooms, in Columbus and Dayton, OH. "With this transaction, we have taken advantage of the current interest rate environment and secured attractive financing," Monty J. Bennett, Ashford Hospitality president and CEO, said in a press release. And, he added, the capital infusion refuels the coffer for additional acquisitions. The terms call for interest-only for two years and a one-year extension option at the initial maturity.

The Merrill Lynch loan closed about three weeks after the self-administered REIT obtained a $10-million junior mezzanine loan secured by interests in the 444-room Hilton Times Square in New York City. The mezz financing obtained through Bear Stearns Commercial Mortgage matures in August 2006 and is interest-only through August 2004. Bennett said that the return will be an initial yield of 11% on an un-leveraged basis "and an ever greater yield on a leveraged basis.

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