SPARTANBURG, SC— Extended Stay America, Inc. has amended its $900 million bank credit facility to provide flexibility to accelerate the pace of development of new hotels. CEO George Johnson Jr. said, “With the projected decline in the rate of supply of new hotel rooms for the next few years, we strongly believe that now is the time to prudently accelerate our pace of development and thereby further increase our industry-leading market share by having additional hotels in operation as the economy recovers.” The amendment modifies certain definitions and increases the total leverage covenant from 4.50 to 5.00 for the period from April 1, 2003 to March 31, 2004 and from 4.50 to 4.75 for the period from April 1, 2004 to June 30, 2004. The leverage covenant returns to the previously scheduled level of 4.50 beginning July 1, 2004. The amendment retains the existing pricing grid which provides for increases to the interest rate on outstanding loans under the credit facility by 0.25% if total leverage is greater than or equal to 4.25 or by 0.75% if total leverage is greater than or equal to 4.75. ESA currently owns and operates 452 hotels under the Extended StayAmerica, StudioPLUS, and Crossland brands, and has 16 hotels under construction.
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