Sunstone Backs Off Bonds Sale

Sunstone Hotel Investors Inc. said Wednesday it postponed plans to sell $150 million worth of bonds, the second time in less than a week that the company has pulled back on a financing move.

On Friday, the San Clemente-based firm said it was calling off plans to sell $50 million in preferred stock.

Sunstone, a real estate investment trust that owns or co-owns 57 hotels in the West, said it shelved plans to sell 10-year notes “due to current market conditions.”

Investors have been reluctant to buy corporate bonds in the past several weeks because of concern a slowdown in Asia will hurt U.S. economic growth, crimping corporate earnings and impairing credit quality. Those worries helped drive the gap in yield, or spread, between corporate bonds and Treasuries to some of the widest levels in years.

Sunstone said it will fund its operations “under more favorable rates of interest from current and alternative financing sources,” including its $350-million bank credit line.