J.P. Morgan & Co., Societe Generale, and Citibank are putting together $2.9 billion of financing to help Marriott International Inc. spin off its lodging operations.

The hotel giant, based in Washington, D.C., said in October that it would spin off its lodging, senior-housing, and distribution businesses into a new company that will bear the Marriott International name.

The company also said it would combine its food service and management businesses with the North American operations of Sodexho Alliance SA, a Paris-based operator of food service and commercial properties. That new company would be named Sodexho Marriott Services Inc.

Marriott said this week that Societe Generale and J.P. Morgan are arranging $1.4 billion in financing for Sodexho Marriott. Proceeds will go to refinance a portion of Marriott's outstanding debt, which totals $1.9 billion.

Societe Generale introduced the companies about 18 months ago and advised Sodexho on the transaction.

Citibank is arranging a $1.5 billion revolving credit facility for Marriott International. Proceeds from that facility will be available as the company grows.

Marriott expects to complete the spinoff and merger by the end of the first quarter.

The hotel industry has become fertile ground for bank financing as it rakes in record profits amid rapid consolidation.

The industry saw $35.6 billion in mergers and acquisitions in 1997, according to Coopers & Lybrand.

Also, real estate investment trusts that achieve investment-grade ratings are obtaining new unsecured lines of credit that let them borrow money at cheaper rates and make acquisitions more easily.

"For the lodging industry there has been tremendous consolidation, and that is going to become even more important in the future," said William J. Shaw, president and chief operating officer of Marriott. Mr. Shaw added that he expects the senior-living industry to undergo similar activity in the next few years.

Mr. Shaw said Marriott plans to add more than 140,000 hotel rooms and 200 senior-living communities over the next five years.

It also plans to double the number of vacation time-shares it sells.

Robert Woods, head of loan syndications at Societe Generale, said that hotel loans have become more appealing because the assets underlying these transactions are very high quality.

Though there are sizable loans in the market now-including one to back Starwood Lodging's $13.3 billion acquisition of ITT Corp.-"I don't think that we're at an allocation problem for the hotel industry," Mr. Woods said. "We will find out on Starwood how big the capacity among banks generally is for hotels."

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