Starwood paying off notes when they could refi them for cheap?
White Plains, NY – Starwood Hotels & Resorts Worldwide, Inc. NYSE: HOT announced today the completion of its cash tender offer the “Tender Offer” to purchase up to $300 million aggregate principal amount of its outstanding 7.875% Senior Notes due 2012 CUSIP No. 85590AAD6/U85650AB2 the “2012 Notes” and its outstanding 6.250% Senior Notes due 2013 CUSIP No. 85590AAK0 the “2013 Notes” and, together with the 2012 Notes, the “Notes”. The Tender Offer expired at midnight, New York City time, on December 4, 2009 the “Expiration Date”.
There’s only one way this makes sense with rates this low. It’s when you’re in a balance sheet recession – a la Japan.
The “green shoots” that may have been planted by government stimulus are stunted at best, but are much more likely to be wilting by now.
Koo’s book showed us what to expect. In a deflationary environment, behavior like this is the norm – not the exception.