Morgans Hotel Group Secures Amendment to Eliminate Financial Covenant in Trust Preferred Securities

NEW YORK--(Business Wire)--
Morgans Hotel Group Co. (NASDAQ: MHGC) ("MHG") today announced it has
successfully secured an amendment to the indenture related to its trust
preferred securities to permanently eliminate the sole financial covenant. In
exchange for the permanent removal of the covenant, MHG paid a one-time fee of
$2.0 million.

In August 2006, MHG issued $50.0 million of trust preferred securities in a
private placement. The securities have a fixed interest rate of 8.68% per year
for the first 10 years after which the interest rate will float at LIBOR plus
3.25%. The securities mature in 2036 and as a result of this amendment are
redeemable by MHG at par at any time. In connection with these securities, MHG
was required to maintain a certain EBITDA to interest coverage ratio, which has
been eliminated as part of this amendment.

"This amendment is one of a series of recently announced financing and other
transactions that strengthen our balance sheet, improve our liquidity and
enhance our financial position going forward. We are proud of the expression of
confidence from our lender groups and appreciate their support," said Marc
Gordon, President of Morgans Hotel Group.

In addition to this amendment to the trust preferred securities, over the last
three months, MHG has added approximately $200 million of liquidity by issuing a
$75 million preferred security and amending the terms of its line of credit to
give MHG access it would not have otherwise had to credit under the line up to a
maximum of $125 million. Further, MHG has entered into a structured transaction
with the mezzanine lender on the Hudson hotel that management believes has the
practical effect of extending the Hudson mezzanine loan by 3.25 years to October
2013.

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
South Beach, Mondrian in Los Angeles, Scottsdale and South Beach, Clift in San
Francisco, and Sanderson and St Martins Lane in London. Morgans Hotel Group and
an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related
assets. Morgans Hotel Group has other property transactions in various stages of
completion, including projects in Boston, Massachusetts; SoHo, New York; Las
Vegas, Nevada; Palm Springs, California 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; risks
associated with the acquisition, development and integration of properties; 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; the impact of any material litigation; the loss of key members
of our senior management; 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 MHG`s Annual Report on Form 10-K for the fiscal year ended
December 31, 2008, and other documents filed by MHG with the Securities and
Exchange Commission from time to time. All forward-looking statements in this
press release are made as of the date hereof, based upon information known to
management as of the date hereof, and MHG 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.

Morgans Hotel Group
Jennifer Foley, 212-277-4166
Vice President of Public Relations
jennifer.foley@morganshotelgroup.com

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