IRVING, TX-FelCor Lodging Trust has taken the final financing step for its takeover of MeriStar Hospitality Corp., headquartered in Washington, DC. The Irving-based hotel REIT has received a green light for a $325-million minimum commitment on a non-recourse first mortgage loan and related mezzanine financing.

Morgan Guaranty Trust Co. of New York and Deutsche Bank are providing the mortgage loan and Deutsche Banc Alex Brown is arranging the mezzanine funding. The mortgage loan carries a three-year initial term with a two-year extension option. It is being secured by 17 hotels. The mezzanine financing also carries the same terms and is being secured by a pledge of ownership interests in the entity owning the mortgaged properties, FelCor says in its announcement. The financing of 2% interest plus LIBOR will be used to repay a portion of MeriStar’s debt, which is being assumed by FelCor. The packages will close as soon as the merger pact is inked, which is to take place before September’s end, subject to shareholders’ approvals.

Richard J. O’Brien, FelCor’s CFO and executive vice president, says “all of the financing associated with the merger has now been obtained or committed.” FelCor is paying $2.7 billion for MeriStar.

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