8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 25, 2008

Morgans Hotel Group Co.
(Exact name of registrant as specified in its charter)

Delaware	001-33738	16-1736884
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

475 Tenth Avenue New York, NY	10018
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 277-4100

Not applicable

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01. Other Events.

On November 25, 2008, Morgans Hotel Group Co. (the “Company”) and the 50/50 joint venture partner for Mondrian in South Beach, Sanctuary West Avenue LLC (the “JV Partner”), amended and restated (i) the Loan Agreement, dated as of August 8, 2006, between 1100 West Properties, LLC (the “Mortgage Borrower”) and Eurohypo AG, New York Branch, CIT Lending Services Corporation and KBC Bank NV (the “Mortgage Loan”), as amended, which matures on August 1, 2009 and is secured by Mondrian in South Beach and (ii) the Mezzanine Loan Agreement, dated as of April 25, 2008, between 1100 West Holdings, LLC, the sole member of the Mortgage Borrower (the “Mezzanine Borrower”), and Eurohypo (the “Mezzanine Loan”), which matures on August 1, 2009 and is secured by a pledge of 100% of the membership interest in the Mortgage Borrower. In connection with the amendment and restatement of the Mortgage Loan and the Mezzanine Loan, an affiliate of the Company and an affiliate of the JV Partner have provided additional mezzanine financing of approximately $22.5 million to 1100 West Holdings II, LLC, the sole member of the Mezzanine Borrower and the joint venture entity for Mondrian in South Beach, to fund completion of the construction and renovations at Mondrian in South Beach.

Each of the Mortgage and Mezzanine Loans were amended and restated to provide for (i) four one-year extension options following the applicable maturity dates to August 1, 2010, July 31, 2011, July 30, 2012 and July 29, 2013, respectively, and (ii) a fifth extension option to October 31, 2013. The first extension is subject to completion of Mondrian in South Beach. It is also a condition to the first and second extensions that the Mortgage Borrower prepay or refinance 50% of the amounts funded by Eurohypo under the First Take-Out Event and the Second Take-Out Event, respectively, as described below. The third and fourth extensions are subject to, among other things, payment of a 0.25% extension fee and satisfaction of minimum debt service coverage ratios of 1.10x and 1.35x, respectively. The fourth extension is also subject to maintaining loan-to-value of 80% on an as-completed basis.

As of November 25, 2008, approximately $84 million was outstanding under the Mortgage Loan, with $53 million held by CIT Lending Services Corporation and KBC Bank NV (the “A-Note”) and $31 million held by Eurohypo (the “B-Note”). Interest rates under the amended and restated Mortgage Loan are fluctuating rates of interest measured by reference to, at the Company’s election, either LIBOR or a base rate, plus a borrowing margin. LIBOR loans have an initial borrowing margin of 3.25% for the A-Note and 4.46% for the B-Note, and base rate loans have an initial borrowing margin of 0.75% for the A-Note and 1.49% for the B-Note, subject to increase over time and/or upon the occurrence of certain events. In connection with the modifications, Eurohypo agreed (i) to purchase, at the option of the A-Note lenders, up to $35 million outstanding under the A-Note upon the earlier of (x) August 1, 2009, (y) an event of default under the Mortgage Loan or (z) a downgrade in Eurohypo’s credit rating below certain thresholds (the “First Take-Out Event”) and (ii) to purchase on or before August 1, 2010, the then outstanding principal balance under the A-Note (the “Second Take-Out Event”).

As of November 25, 2008, approximately $28 million was outstanding under the Mezzanine Loan. Interest rates under the amended and restated Mezzanine Loan are fluctuating rates of interest measured by reference to, at the Company’s election, either LIBOR or a base rate, plus a borrowing margin. LIBOR loans have an initial borrowing margin of 6.0% and base rate loans have an initial borrowing margin of 10.0%.

The Mortgage Borrower and the Mezzanine Borrower are required to maintain interest rate caps for amounts outstanding under the Mortgage Loan and the Mezzanine Loan, respectively.

Copies of the Amended and Restated Loan Agreement and Amended and Restated Mezzanine Loan Agreement, each dated as of November 25, 2008, will be filed as exhibits to the Company’s annual report on Form 10-K for fiscal year ended December 31, 2008. The foregoing description of the agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the agreements. A copy of the press release announcing entry into the Amended and Restated Loan Agreement and Amended and Restated Mezzanine Loan Agreement is furnished as Exhibit 99.1 hereto.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press release issued by Morgans Hotel Group Co. dated November 25, 2008

SIGNATURES  

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.  

	MORGANS HOTEL GROUP CO.
Date: November 25, 2008	By:	/s/ Richard Szymanski
		Richard Szymanski
		Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release issued by Morgans Hotel Group Co. dated November 25, 2008

EX-99.1

Exhibit 99.1

Contacts:
Richard Szymanski
Chief Financial Officer
Morgans Hotel Group
212.277.4188

Jennifer Foley
Director of Public Relations
Morgans Hotel Group
212.277.4166

MORGANS HOTEL GROUP ANNOUNCES A SERIES OF LOAN EXTENSIONS FOR MONDRIAN IN SOUTH BEACH
Marcel Wanders’ re-imagination of Mondrian to open December 1st

NEW YORK, NY — November 25, 2008 — Morgans Hotel Group Co. (NASDAQ: MHGC) (“Morgans”) today announced a series of extensions of the third-party financing totaling $112 million for Mondrian in South Beach, an unconsolidated joint venture owned 50% by Morgans. Under the amended agreement, the initial maturity date of August 1, 2009 can be extended to July 29^th, 2013, subject to certain conditions.

Chief Investment Officer of Morgans Hotel Group, Marc Gordon said, “We are very proud of the confidence exhibited in us and this project by the lenders to provide us with a series of extensions, particularly in this market. We look forward to opening the new Mondrian in South Beach this Monday, December 1^st and expect our guests, residents and other visitors to enjoy this spectacular new offering from Morgans.”

The extension options are subject to certain conditions including repayment of $17.5 million by August 1, 2009, debt service coverage ratios for the extensions for the third and fourth years and a loan to value test for the fourth extension. Morgans and its partners have each funded 50% of a new mezzanine loan for $22.5 million for development of the new Mondrian.

An extension of the $10 million Gale loan was announced separately on November 5^th. Morgans has no significant consolidated maturities until 2010 and has the option to extend the $370 million of mortgages outstanding on the Hudson and Mondrian in LA to October 2011 from October 2010 subject to certain conditions. Morgans remaining consolidated debt consists of its convertible notes due in 2014 and its trust preferred notes due in 2036. Finally, Morgans is evaluating options with regard to its non-recourse mortgage on Mondrian in Scottsdale.

Fred Kleisner, CEO of Morgans Hotel Group said, “This series of loan extensions for Mondrian in South Beach, coupled with the recent extension of the Gale loan, demonstrates Morgans solid financial position and ability to obtain and extend credit in the lender community, even in this difficult environment. We look forward to continuing to execute on our strategy as we move into 2009.”

About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ: MHGC) operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in Miami, Mondrian in Los Angeles and Scottsdale, Clift in San Francisco, and Sanderson and St Martins Lane in London. Morgans and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans has other property transactions in various stages of completion, including projects in Miami Beach, Florida; Chicago, Illinois; SoHo, New York; Las Vegas, Nevada; Palm Springs, California; Boston, Massachusetts; and Dubai, UAE. For more information please visit www.morganshotelgroup.com.

Forward-Looking and Cautionary Statements
Statements contained in this press release which are not historical facts are forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of words such as “expects,” “plans,” “estimates,” “projects,” “intends,” “believes,” “guidance,” and similar expressions that do not relate to historical matters. These forward-looking statements are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated, due to a number of factors which include, but are not limited to, downturns in economic and market conditions, particularly levels of spending in the business, travel and leisure industries; hostilities, including future terrorist attacks, or fear of hostilities that affect travel; risks related to natural disasters, such as earthquakes and hurricanes; the completion of transactions and the integration of properties with our existing business; the seasonal nature of the hospitality business; changes in the tastes of our customers; increases in real property tax rates; increases in interest rates and operating costs; general volatility of the capital markets and our ability to access the capital markets; and changes in the competitive environment in our industry and the markets where we invest, and other risk factors discussed in Morgans Hotel Group Co.’s Annual Report on Form 10-K and other documents filed by the Company with the Securities and Exchange Commission from time to time. All forward-looking statements in this press release are made as of today, based upon information known to management as of the date hereof, and the Company assumes no obligations to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.