Extended Stay America to launch $375 million term loan on Wednesday

By Sara Rosenberg

New York, May 27 - Extended Stay America Inc. is scheduled to hold a bank meeting at 2 p.m. ET on Wednesday to launch a $375 million senior secured term loan, according to a market source.

Goldman Sachs Bank USA, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are the joint lead arrangers on the deal.

Proceeds will be used to refinance $365 million of mezzanine debt and pay related transaction fees and expenses.

"We are pursuing this opportunity to reduce our debt service related to our mezzanine financing and further enhance our cash flow. We intend to maintain our strong capital structure and financial flexibility which will allow us to further deleverage as we generate free cash flow in the future," Peter Crage, chief financial officer, said in a news release.

Closing is subject to a number of factors, including market interest and other conditions.

Extended Stay America is a Charlotte, N.C.-based owner and operator of company-branded hotels.

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