Location: Three Hotel Portfolio
Type: Permanent Loan
Our client was seeking to take advantage of arbitrage in the Israeli bond markets by floating a secured and unsecured offering. To do so, the company's 10 hotel portfolio needed to be restructured into an opco / propco with a BVI entity. We decided the optimal strategy, which was 3 hotels being cherry picked for a CMBS execution, keeping an existing balance sheet loan in place on 4 hotels but securing the lender's willingness to restructure and utilizing Israeli mortgage proceeds on 3 hotels with underwriting challenges. The closing required the simultaneous cooperation of the bond trustee, the CMBS lender, the balance sheet lender on the restructure, a balance sheet lender allowing an early prepayment and the special servicer on a loan being defeased. The CMBS loan that we sourced was uniquely not cross-collateralized and had 3 years of interest only, while receiving full underwriting credit for displacement in the T-12 that was still ongoing from PIPs.