Prime Hospitality Inks New Credit Agreement

FAIRFIELD, NJ— Prime Hospitality Corp. has executed a senior revolving credit facility consisting of a four-year, $125 million revolving line of credit. The line, under certain circumstances, may be increased by an aggregate principal amount not to exceed $125 million and is secured by the equity interests of certain of Prime Hospitalitys subsidiaries. In addition, the credit agreement provides for the redemption of Prime Hospitalitys 9.25% first mortgage notes due 2006 on or before September 5. Proceeds will be used to redeem the notes, to pay associated transaction costs and to provide financing for working capital and other general corporate purposes. Douglas Vicari, Prime’s svp/CFO said the notes redemption “will result in significant interest savings for our company. The new senior structure fits well into our capital structure and will be an important component in helping the company achieve its objectives over the next four years.” CIBC World Markets acted as lead arranger and is administrative agent for the new facility. Prime Hospitality also is calling for the August 21 redemption of all of its outstanding 9.25% first mortgage notes. The redemption price shall be 103.083% of the principal amount of the notes, plus accrued and unpaid interest, to, but not including, the date of redemption. Wells Fargo Bank Minnesota, N.A. will act as the paying agent and trustee in connection with the redemption.