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BETHESDA, MD-Host Marriott Corp. has announced that it will begin the New Year on the right financial foot with the repayment of approximately $295 million in debt with funds from the settlement on issues surrounding the Sept. 11, 2001 terrorist attacks and the company’s New York Marriott World Trade Center and New York Marriott Financial Center hotel properties. The news comes not quite a month after the announcement of a $370-million settlement in insurance proceeds concerning the aforementioned matter.

Repayment of the debt will be threefold, and will include Host Marriott LP’s redemption of remaining 8.45% Series C senior notes, which are valued at $218 million and due in 2008. The rest of the repayment consists of partial repayment of a $33-million mortgage debt secured by four hotels in Canada, and a $44-million debt secured by a Ritz Carlton hotel in Atlanta and another Ritz Carlton in Naples, FL. The transactions will yield an increase in expenses totaling $18 million for 2003 and an additional $11 million in 2004.

Host Marriott has been making consistent strides in debt repayment over the last couple of months. In late October, the company revealed it would repay some of its debt at a lower interest rate by issuing $500 million in senior notes. Proceeds from that transaction allowed for the redemption of $429 million of 7.875% senior notes. Remaining funds from the terror attack settlement, a total of $65 million, went to repaying debt relating to the acquisition of the World Trade Center Marriott property.

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