IHR Interstate Hotels & Resorts,

ARLINGTON, Va., March 12 /PRNewswire-FirstCall/ -- Interstate Hotels & Resorts (NYSE:IHR), one of the nation's largest independent hotel management companies, today announced that it closed on a new, $125 million senior secured credit facility, which matures on March 9, 2010. The new facility consists of a $65 million term loan and a $60 million revolver, both bearing an interest rate of LIBOR plus 275 basis points. Lehman Brothers Inc. was the sole lead arranger and sole bookrunner for the new facility, while Societe Generale was the syndication agent and Calyon New York Branch and Merrill Lynch Capital were the co-documentation agents. "We lowered our interest rate by 175 basis points on the term loan and 50 basis points on the revolving loan," said Bruce Riggins, chief financial officer. "In addition, our required principal payments have been substantially reduced from $5 million per year to approximately $650,000 per year, providing more than $5 million of additional operating cash flow per year." Upon closing, the company immediately repaid $15.5 million outstanding under the existing credit facility. On April 1st, the company plans to repay its $19 million non-recourse mortgage loan associated with the Hilton Concord. After this transaction, the company will have total debt outstanding of $122.5 million, consisting of the new $65 million senior term loan and $57.5 of mortgage debt. "This new credit facility not only provides us with a lower cost of borrowing, it gives us greater capacity and flexibility to continue our growth strategy to acquire ownership interests in hotel real estate," Riggins added. "We now have over $80 million of cash and borrowing capacity available to execute this strategy." As of February 28, Interstate Hotels & Resorts operated 204 hospitality properties with more than 46,000 rooms in 38 states, the District of Columbia, Canada and Russia. For more information about Interstate Hotels & Resorts, visit the company's Web site: http://www.ihrco.com/. This press release contains "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995, about Interstate Hotels & Resorts, including those statements regarding future operating results and the timing and composition of revenues, among others, and statements containing words such as "expects," "believes" or "will," which indicate that those statements are forward-looking, although not all forward-looking statements will contain such words. Except for historical information, the matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially, including the volatility of the national economy, changes in business and leisure travel patterns or levels, fuel cost, economic conditions generally and the hotel and real estate markets specifically, international and geopolitical instability, health concerns, threatened or actual terrorist attacks, governmental actions, legislative and regulatory changes, availability of debt and equity capital, interest rates, competition, weather conditions or natural disasters, changes in supply and demand for lodging facilities in our current and proposed market areas, and the Company's ability to manage integration and growth. Additional risks are discussed in Interstate Hotels & Resorts' filings with the Securities and Exchange Commission, including Interstate Hotels & Resorts' annual report on Form 10-K for the year ended December 31, 2005. Contact: Carrie McIntyre SVP, Treasurer Interstate Hotels & Resorts (703) 387-3320 DATASOURCE: Interstate Hotels & Resorts CONTACT: Carrie McIntyre, SVP, Treasurer of Interstate Hotels & Resorts, +1-703-387-3320 Web site: http://www.ihrco.com/

Copyright