Starwood 2008 Annual Report Download - page 149

On May 23, 2008, the Company completed a public offering of $600 million of senior notes, consisting of
$200 million aggregate principal amount 6.25% Senior Notes (“6.25% Notes”) due February 15, 2013 and
$400 million aggregate principal amount 6.75% Senior Notes (“6.75% Notes”) due May 15, 2018 (collectively, the
“Notes”). The Company received net proceeds of approximately $596 million, which were used to reduce the
outstanding borrowings under its Revolving Credit Facilities. Interest on the 6.25% Notes is payable semi-annually
on February 15 and August 15 and interest on the 6.75% Notes is payable semi-annually on May 15 and
November 15. The Company may redeem all or a portion of the Notes at any time at the Company’s option at a price
equal to the greater of (1) 100% of the aggregate principal plus accrued and unpaid interest and (2) the sum of the
present values of the remaining scheduled payments of principal and interest discounted at the redemption rate on a
semi-annual basis at the Treasury rate plus 35 basis points for the 6.25% Notes and 45 basis points for the
6.75% Notes, plus accrued and unpaid interest. The Notes rank parri passu with all other unsecured and
unsubordinated obligations. Upon a change in control of the Company, the holders of the Notes will have the
right to require repurchase of the respective Notes at 101% of the principal amount plus accrued and unpaid interest.
Certain covenants on the Notes include restrictions on liens, sale and leaseback transactions, mergers, consoli-
dations and sale of assets.
On April 11, 2008, the Company’s $375 million Revolving Credit Facility that matured on April 27, 2008 was
converted to a term loan (“Term Loan”). The proceeds of the Term Loan were used to repay outstanding revolving
loans. The Term Loan expires on April 11, 2010, however, it can be extended until February 10, 2011 as long as
certain extension requirements are satisfied and subject to an extension fee. The term loans may be prepaid at any
time at the Company’s option without premium or penalty.
In the second quarter of 2008, the Company borrowed approximately $66 million under an international
revolving credit facility, which was repaid during the fourth quarter of 2008 in conjunction with the sale of three
properties by the Company (see Note 17).
On September 13, 2007, the Company completed a public offering of $400 million 6.25% Senior Notes
(“6.25% Notes”) due February 13, 2013. The Company received net proceeds of approximately $396 million, which
were used to reduce the outstanding borrowings under its Revolving Credit Facility. Interest on the 6.25% Notes is
payable semi-annually on February 15 and August 15. At any time, the Company may redeem all or a portion of the
6.25% Notes at the Company’s option at a price equal to the greater of (1) 100% of the aggregate principal plus
accrued and unpaid interest and (2) the sum of the present values of the remaining scheduled payments of principal
and interest discounted at the redemption rate on a semi-annual basis at the Treasury rate plus 35 basis points, plus
accrued and unpaid interest. The 6.25% Notes rank parri passu with all other unsecured and unsubordinated
obligations. Upon a change in control of the Company, the holders of the 6.25% Notes will have the right to require
repurchase of the respective Notes at 101% of the principal amount plus accrued and unpaid interest. Certain
covenants in the 6.25% Notes include restrictions on liens, sale and leaseback transactions, mergers, consolidations
and sale of assets.
On June 29, 2007, the Company entered into a credit agreement that provides for two term loans of
$500 million each. One term loan matures on June 29, 2009, and the other matures on June 29, 2010. Proceeds
from these loans were used to repay balances under the existing Revolving Credit Facility (established under the
2006 Facility referenced below), which remains in effect. The Company may prepay the outstanding aggregate
principal amount, in whole or in part, at any time. The covenants in this credit agreement are the same as those in the
Company’s existing Revolving Credit Facility.
On April 27, 2007 the Company amended its Revolving Credit Facility to the interest rate (from the original
rate of LIBOR + 0.475% to LIBOR + 0.400%) and increase commitments by $450 million, to a total of
$2.250 billion. Of this amount, $375 million expired on April 27, 2008, and the remaining $1.875 billion will
expire in February 2011.
F-33
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)