Lodgian Provides Further Update on Remaining Maturing Mortgage Debt
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Lodgian Provides Further Update on Remaining Maturing Mortgage Debt
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Category: Worldwide
This is a press release selected by our editorial committee and published online for free on 2009-07-08
Obtains 30-day extension on mortgage pool, continues negotiations for longer-term solution
Lodgian, Inc. (NYSE Alternext US: LGN), one of the nation's largest independent hotel owners and operators, today announced that the company has obtained an extension of the maturity date for the Merrill Lynch Fixed Rate Pool #3 ("Pool #3"). As of July 1, 2009, the principal amount of Pool #3 was $45.7 million. The company and the special servicer for Pool #3 have entered into an extension agreement to extend the maturity date of this indebtedness until August 1, 2009. Given the extension of the maturity date, the company is not in default of the original loan. The company paid no extension fee in connection with this short-term extension. The 30-day extension is intended to provide the parties an opportunity to reach an agreement on a longer-term maturity extension.
The company and the special servicer are currently negotiating a longer-term maturity extension for Pool #3; however, the company can provide no assurances that the parties will reach such an agreement. In the event that the company is unable to achieve a long-term extension of Pool #3, the company expects that anticipated cash flow from the hotels securing Pool #3 may not be sufficient to meet the related debt service obligations and it may be necessary to transfer the properties securing this indebtedness to the lender in satisfaction of the company's obligations.
A schedule indicating the principal balance of Pool #3, as of July 1, 2009, as well as a listing of the hotels that serve as collateral under Pool #3, is attached as an exhibit to this press release.
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