FelCor Clears $615M Credit Line While Wyndham Buys Time

The mixed bag of Dallas hotel news, however, has the spotlight on FelCor, still gaming out a move to buy in a market ripe with opportunity. FelCor's REIT status keeps everything guarded, but the latest move basically is just a finishing touch for a hotel buy in the fourth quarter or possibly Q1 2003. The amended facility builds in flexibility that "allows us to feel very comfortable in acquiring assets," Richard J. O'Brien, FelCor's executive vice president and CFO, tells GlobeSt.com.

In this quarter, FelCor built up $100 million in excess cash, just as O'Brien told investors it would in the Q1 earnings call. About $40 million in debt was cleared from the credit line and the balance banked, he confides.

FelCor's positioning for an end-of-the-year buy is right in line with Jones Lang LaSalle Hotels' latest report. Historically, the market experiences one fourth of its transactions right before the calendar flips. This year, the hotel group's prediction is that $1 billion in hotel sales volume will close in the fourth quarter, an increase of 125% over Q4 2001.

For FelCor, the credit line changes by lenders JPMorgan Chase Bank and Deutsche Bank Trust Co. Americas are assurances that "the lending environment for companies like FelCor with hard assets continues to be strong," O'Brien says. Changes mostly were related to financial covenants, such as unsecured interest coverage and fixed charge debt.

The facility's maturity date remains the same, November 2004. It has two one-year extension options. There also are no changes in the interest structuring which, if done today, would be about 5%.

As for Wyndham International, its focus is keeping above the required $1 trading level to stay on the NYSE. The action is predicated on a 30-day average, which for Wyndham was $1.16 per share as of the June 21 "cure period" close of $1.08. Wyndham closed yesterday at 98 cents per share.

The situation admittedly is being closely watched by all. Andrew Jordan, Wyndham's vice president of marketing, won't comment about the stock prices since they are out of his control. Wyndham is, he tells GlobeSt.com, controlling what it can with a hard focus on selling non-core strategic assets and incorporating innovative perks to beef up business. "There are a lot of initiatives in place to drive revenues," he insists.

The per share plummet naturally took place after Sept. 11. According to Hoover's Online, Wyndham's 52-week low was 34 cents and its high, $2.75 per share. The trading price is the sole issue with the NYSE gurus, according to Wyndham.