Acted as financial adviser to the Special Servicer (representing senior creditors) on the restructuring of a senior loan and a CMBS transaction secured by a portfolio of 61 hotels operated by the Intercontinental Hotels Group. Also acted as consent solicitation agent for the issuer.
The original term loan of up to c. £756m was secured against the portfolio of hotel assets (and subsequently securitised in the Tahiti Finance CMBS transaction). The loan could not potentially be repaid on maturity due to market conditions and we were engaged to assist the special servicer and noteholders with the consideration of a number of options which included a loan and / or CMBS note extension, adjustment to the loan and / or CMBS note margins and principal paydowns through additional equity contributions.
- We played a pivotal role in the successful restructuring of both the loan and the CMBS transaction. The restructuring included an upfront equity prepayment, a full cash sweep, extension fees and margin increases on the CMBS notes, as well as a renegotiation of deferred consideration with the originating bank.
- We drove the entire process and had a particular focus on ensuring noteholders’ views were central to the restructuring by setting up a steering committee representing in excess of 75% of each class of the CMBS notes. We also managed the competing interests of each class of noteholders. We utilised our expertise in negotiating with experienced sponsors and potentially difficult junior creditors to execute a consensual restructuring.
- The restructuring resulted in reduced credit risk for noteholders, improvement in economics and a stabilised debt package, that provided sufficient timing for a refinancing when the debt markets recovered leading to a 100% recovery for all noteholders.
- IFR Markets made reference to a BAML Research Report that mentioned seven “benefits” delivered by the restructuring to noteholders. BAML went on to say that they were not aware of another restructuring that awarded all these concessions to noteholders. In their view, the key was the “involvement of a third party adviser that contributed to the success of the restructuring” namely Brookland.