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New Credit Facility for LaSalle Hotel - Analyst Blog

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LaSalle Hotel Properties ( LHO ) recently announced that it has entered into a new senior unsecured credit facility worth $750.0 million.The new facility replaces the company's existing $450.0 million facility expected to mature in April, 2012.The new facility matures on January 30, 2017 and also comes with an option of extending the total commitment up to $1.0 billion.

This apart, LaSalle also intends to complete the acquisition of Park Central Hotel by January 10, 2012. The company expects to fund this transaction with cash, borrowings from its new $750.0 million credit facility and issuance of about $8.0 million of operating partnership units valued at $27.00 per share.

As of September 30, 2011, the company had total outstanding debt of $687.2 million and cash and cash equivalents of $217.4 million.

LaSalle reported adjusted FFO (fund from operations) of $42.4 million or 50 cents per share in the third quarter of 2011 compared with $32.6 million or 46 cents per share in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

LaSalle owns 36 upscale full-service hotels, totaling over 8,900 guest rooms in 13 markets across 9 states in the U.S. and the District of Columbia. Apart from improving the size and quality of its portfolio through strategic acquisitions of high-quality hotels, the company plans to continue selling non-core properties that do not fit with its long-term strategy.

LaSalle boasts a geographically diversified portfolio with high barriers to entry and a strong demand for high-quality facilities. The company focuses on owning, redeveloping and repositioning upscale full-service hotels in urban, resort and convention markets.

La Salle currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Starwood Hotels & Resorts Worldwide Inc ( HOT ) also holds a Zacks #3 Rank.

STARWOOD HOTELS ( HOT ): Free Stock Analysis Report

LASALLE HTL PRP ( LHO ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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