- FelCor Lodging's (NYSE:FCH) outstanding bonds have restrictive covenants limiting the amount of debt FelCor can incur as well as the amount of cash that can be distributed to FelCor shareholders, says Ashford Trust (AHT) CEO Doug Kessler, explaining his company's reasoning for the all stock bid.
- The bonds also contain a sizable "make whole" payment estimated to be $110M, or $0.80 per FelCor share payable upon redemption of the paper.
- Ashford's all stock deal should thus be preferable to FelCor owners, but Kessler and team are willing to discuss what might be a more favorable mix.
- Source: Press Release