IRVING, TX-In a repeat performance, FelCor Lodging Trust Inc. has raised more capital than it set out to glean from a share sale of the $1.95 Series A cumulative preferred stock. The one-day run on the market has ended with $52 million or $6 million more than projected.

The new money will used to redeem $60 million of 9.5% senior notes due 2008, leaving a $100-million balance in the REIT’s replacement program. The end result will be a 1.5% savings to shareholders when the stock is swapped. The latest sale brought 2.3 million shares to market at $23.22 each at an 8.5% dividend yield.

“There is a lot of demand for our paper,” Andrew J. Welch, FelCor’s senior vice president and treasurer, tells GlobeSt.com about an offering set up with two million shares and pumped up after the starting bell rang on the sale. The offering allowed up to 15% extra shares to be sold at the discretion of the New York City-headquartered bookrunners and joint lead managers, Citigroup Global Markets Inc. and Bear, Stearns & Co. Inc.

At the onset of last week’s sale, it was projected $46 million would be raised and applied to retiring $50 million of the 2008 notes. About two months ago, FelCor raised $115 million or $40 million more than it expected on a market run with the same goal–replacement capital for the 2008 notes.

“We’re clearly pleased with where we are so far,” Welch says of the back-to-back drives to raise funds to pay down debt, now standing at $1.8 billion or $200 million less than when the year started. He says the net result is the cost of debt, so far, has been lowered by about 50 basis points.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.