Red Roof Inn in talks with lenders-WEB ONLY

Budget hotel chain Red Roof Inn Inc. has defaulted on $361.4 million of mortgage debt, a rating agency that tracks mortgage defaults said yesterday.
The hotel chain fell 30 days delinquent on four securitized loans for which the collateral was 131 Red Roof properties, said Frank A. Innaurato, managing director of Realpoint LLC, a debt rating company based in Horsham, Penn.
Columbus, Ohio-based Red Roof Inns has 345 hotels in 36 states and employs more than 6,000 people. It has about a dozen hotels in Indiana, including four in the Indianapolis area.

The company said in a statement that it has entered into discussions with its lenders to restructure debt related to the acquisition of real estate assets of the company.
“While the company is profitable on an operating basis, Red Roof believes that a debt modification is the best way for the company to manage through the current downturn and position itself for future growth,” the statement said. “To date, discussions have been highly constructive and we expect a positive resolution in due course.”
The company said the discussions do not affect the day-to-day operations of the company’s hotels and will not affect its employees, vendors or franchise owners.
Red Roof Franchising, which operates as a separate legal entity, is not a party to any of the loan agreements, the statement said.
The company’s spokesman, Andrew Alexander, an executive vice president, declined to discuss the statement further.
Red Roof Inn was founded in 1973 by a Columbus builder and contractor.
The North American division of French hotels group Accor SA acquired the chain in 1999.
The company was sold to the Global Specialization Situations Group of CitiGroup Global Markets Holdings Inc. and Westbridge Hospitality Fund LP for $1.3 billion in 2007, according to a Sept. 10, 2007, statement announcing the deal’s closing.