Brief: Starwood ends forward equity swap, buys back shares

Under the arrangement, known as a forward equity swap, Starwood was to receive financing from the investment banks by putting up about 4 million of its shares as collateral and promising to repurchase the shares at the expiration of the agreement. If Starwood's stock had climbed, it could have repaid the investment banks with fewer shares.

The price of Starwood's shares declined, however, and the company was forced to put up an additional 4 million shares as collateral. Starwood chose to redeem its collateral early and eliminate the uncertainty of an arrangement that depended upon its share price.

Starwood owns the Caesars Palace and Desert Inn resorts on the Las Vegas Strip.

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