Red Lion Hotels Corporation
) recently announced the extension of its credit line with Wells
Fargo Bank which is a unit of
Wells Fargo & Co.
). The new secured facility worth $45 million will allow the
company to refinance about $38 million in maturing CMBS debt and
pay expenses related to the transaction. The balance will be
utilized for general corporate purposes and capital expenditures.
Moreover, a $10 million two-year revolving line of credit is
available under the facility. The hotelier has guaranteed
19 of its properties as security for the new agreement.
Management believes that the company's improved balance sheet
helped it to get favorable terms and conditions related to the
Wells Fargo credit facility. As of Mar 31, 2013, Red Lion had
$5.2 million in cash and $10.0 million on its line of credit.
Also, during the first quarter of 2013, Red Lion modified its
existing credit facility with Wells Fargo Bank in order to extend
the maturity period.
Following first-quarter 2013, Red Lion used a portion of the
proceeds from the sale of the Kalispell Center Mall to pay down
$8.8 million of the existing credit facility. In fact, since Jun
2011, Red Lion reduced its debt by over $58 million and purchased
$37 million of leased properties using proceeds from the sale of
The latest deal ensures more flexibility for Red Lion, including
no penalties for prepayment. As a matter of fact, management can
tap growth opportunities both at franchised and owned hotels with
the excess liquidity obtained from this facility.
Red Lion Hotels currently retains a Zacks Rank #4 (Sell). Some
casino-hotel operators with a favorable outlook include
Las Vegas Sands Corp.
MGM Resorts International
) both carrying a Zacks Rank #2 (Buy).
LAS VEGAS SANDS (LVS): Free Stock Analysis
MGM RESORTS INT (MGM): Free Stock Analysis
RED LION HOTELS (RLH): Free Stock Analysis
WELLS FARGO-NEW (WFC): Free Stock Analysis
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