The Irving, TX-based REIT's select placement is a seniorfloating rate note with a 2011 maturity. The notes will bearinterest at the six-month Libor rate plus 4.25%. Sale proceeds willbe used to buy up to $115 million of outstanding 9.5% senior notesdue 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-millionadd-on to last month's $350-million drive, which subsequently wascut to a $175-million private placement when the capital marketsfailed to respond amid a week of harried financial news aboutrising interest rates and inflation. With the markets stabilized,FelCor took another run, this time walking away with $40 millionmore than it planned, he says. The notes are pre-payable in 30months.

"There's always been a good appetite for FelCor paper," Welchsays. "We're pleased the market was this receptive. We weresmiling." He says a lot of the buyers are return players, US-basedinvestors and 2008 note holders.