MHI Hospitality Corporation Announces Refinancing of Hilton Savannah DeSoto Hotel
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MHI Hospitality Corporation Announces Refinancing of Hilton Savannah DeSoto Hotel
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Category: North America & West Indies / Carribean islands
This is a press release selected by our editorial committee and published online for free on 2007-08-06
MHI Hospitality Corporation (Amex: MDH) announced today that through its subsidiary, Savannah Hotel Associates, L.L.C., the Company has entered into and closed a $23 million, 10-year mortgage refinancing with MONY Life Insurance Company of the existing note and security deed on the Hilton Savannah DeSoto. After payment of customary refinancing closing fees and expenses, Savannah Hotel Associates intends to use approximately $11.2 million of the proceeds to fund a product improvement plan of the hotel in connection with its relicensing of the hotel with Hilton. An additional $9.4 million of the proceeds will be allocated to repay and satisfy existing indebtedness secured by the hotel and $2.4 million will pay down obligations on the Company's existing credit facility. The new mortgage loan matures August 1, 2017, bears interest at 6.06% per year and only requires payment of interest for the first 36 months of its term.
Andrew M. Sims, President and Chief Executive Officer of MHI Hospitality Corporation, commented, "We are very pleased with the enhanced financial terms of this refinancing, which compares very favorably with the existing mortgage's interest rate of 7.49%. A portion of these proceeds will be deployed to reposition the Savannah DeSoto Hotel in conjunction with our asset's newly extended Hilton franchise license."
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