ENN Equity Inns

Equity Inns, Inc. (NYSE: ENN), the third largest hotel real estate investment trust (REIT), today announced that it has obtained a new $150 million unsecured line of credit from a syndicated group of banks co-led by J.P. Morgan Securities Inc. and Calyon New York Branch. The $150 million unsecured facility bears a variable interest rate of LIBOR plus 1.25% to 1.88% based on outstanding borrowings and leverage and matures in September 2010, with a one-year extension at the Company's option. The facility also has an accordion feature that allows the Company, subject to certain lender approval, to extend the borrowing capacity to $250 million. This new facility replaces the Company's $125 million secured line of credit that was due to mature in June 2008. J. Mitchell Collins, Executive Vice President and Chief Financial Officer, commented, "The new unsecured credit facility, a reflection of our strong cash flows, offers us greater financial flexibility at more attractive borrowing rates than our prior facility. Given the improved pricing, we expect that this new facility will save the Company approximately $600,000 in annual interest expense, depending on the Company's borrowings. It will allow us to continue to maintain a strong balance sheet, while providing us an additional source of capital to fund future acquisitions. Upon completing this transaction, we now have 36 unencumbered hotel assets, as compared to no unencumbered hotel assets at the end of 2003." Forward Looking Statements Certain matters discussed in this press release which are not historical facts are "forward-looking statements" within the meaning of the federal securities laws and involve risks and uncertainties. The words "may," "plan," "project," "anticipate," "believe," "estimate," "forecast, "expect," "intend," "will," and similar terms are intended to identify forward-looking statements, which include, without limitation, statements concerning our outlook for the hotel industry, acquisition and disposition plans for our hotels and assumptions and forecasts of future results for fiscal year 2006. Forward-looking statements are not guarantees of future performance and involve numerous risks and uncertainties which may cause our actual financial condition, results of operations and performance to be materially different from the results of expectations expressed or implied by such statements. General economic conditions, future acts of terrorism or war, risks associated with the hotel and hospitality business, the availability of capital, risks associated with our debt financing, hotel operating risks and numerous other factors, may affect our future results and performance and achievements. These risks and uncertainties are described in greater detail in our 2005 Annual Report on Form 10-K filed on March 15, 2006, and our other periodic filings with the United States Securities and Exchange Commission (SEC). We undertake no obligation and do not intend to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Although we believe our current expectations to be based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that actual results will not differ materially. About Equity Inns Equity Inns, Inc. is a self-advised REIT that focuses on the upscale extended stay, all-suite and midscale limited-service segments of the hotel industry. The Company, which ranks as the third largest hotel REIT based on number of hotels, currently owns 125 hotels with 14,924 rooms located in 35 states. For more information about Equity Inns, visit the Company's Web site at www.equityinns.com.