Blackstone Group, Centerbridge Partners and Paulson & Co. are reportedly planning to sell US$3.5 billion in debt to refinance Extended Stay Hotels, which they bought at a bankruptcy auction in 2010.
Bloomberg and The Wall Street Journal reported that according to people familiar with the matter, JPMorgan Chase & Co. and Deutsche Bank have arranged US$2.5 billion in loans and US$1 billion in mezzanine loans and the refinancing will allow Blackstone, Centerbridge and Paulson to recoup half their equity investment.
The three investment companies bought Extended Stay for US$4.2 billion, using US$2.7 million in debt and US$1.5 billion in equity.
Extended Stay Hotels is currently in the process of consolidating and reflagging their brands Extended Stay Deluxe, Homestead Studio Suites and Studio Plus Deluxe Suites under one brand, Extended Stay America.