Budget hotel chain Red Roof Inn Inc. has defaulted on $361.4 million of mortgage debt, credit rating agency, Realpoint LLC, said on Tuesday.
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, the Associated Press reported.
Columbus, Ohio-based Red Roof Inns 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.
“Due to the current state of the lodging industry, Red Roof Inns Inc. has entered into discussions with its lenders in order to restructure the debt related to the acquisition of the real estate assets of the company,” Red Roof said in an e- mailed statement. “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.”
According to the company statement, the ongoing discussions will not affect the day-to-day operations of the company's hotels and will also not affect its employees, vendors or franchise owners.