IRVING, TX-Marking its second private placement in two months, FelCor Lodging Trust Inc. is banking $40 million more than it sought from a select group of buyers. The $115 million of new capital will roll into the till this week.

The Irving, TX-based REIT’s select placement is a senior floating rate note with a 2011 maturity. The notes will bear interest at the six-month Libor rate plus 4.25%. Sale proceeds will be used to buy up to $115 million of outstanding 9.5% senior notes due 2008. The exchange will save $4 million annually in interest, Andrew J. Welch, FelCor’s senior vice president and treasurer, tells GlobeSt.com.

Welch says FelCor launched the latest campaign as a $75-million add-on to last month’s $350-million drive, which subsequently was cut to a $175-million private placement when the capital markets failed to respond amid a week of harried financial news about rising interest rates and inflation. With the markets stabilized, FelCor took another run, this time walking away with $40 million more than it planned, he says. The notes are pre-payable in 30 months.

“There’s always been a good appetite for FelCor paper,” Welch says. “We’re pleased the market was this receptive. We were smiling.” He says a lot of the buyers are return players, US-based investors and 2008 note holders.

FelCor’s objectives this year are to pay off $175 million of senior notes that mature in October and refinance $600 million of 2008 notes via asset sales and note exchanges. To date this year, FelCor has collected $40 million from $125 million of hotel sales. Another $115 million was raised in a stock offering in April. Then came the back-to-back senior note sales. Welch says there is just $170 million remaining in the $600-million refinance plan … and it will be completed by year’s end.

The latest add-on, though, pushes FelCor’s floating rate debt to 30%, a corporate-imposed ceiling. And, Welch says, it will hang there for awhile.

FelCor started the year with $2 billion in debt. Its 2004 goal is to lop off $200 million. “We are on target,” Welch says, noting the latest tabulation shows debt has dipped to $1.9 billion.

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