Canyon Capital Provides $40.5 Million 'DIP' Loan to Hawaii Hotelier Andre Tatibouet.

BEVERLY HILLS, Calif. -- Canyon Capital Realty Advisors is financing a $40.5 million debtor-in-possession loan to well-known Hawaii hotelier Andre S. Tatibouet. Canyon worked closely with Ramsfield Hospitality Finance, which funded an $8.1 million B note in the Loan. The loan will facilitate Tatibouet's efforts to emerge from personal bankruptcy and re-establish his hotel business in the islands. The new loan is secured by the 247-room Coral Reef Hotel in Waikiki Beach and an 18,000 square foot home owned by Tatibouet in the Diamond Head area of Honolulu.

The complex transaction took several months to complete due to the number of parties involved in the bankruptcy proceedings. The loan proceeds repaid all of the hotel's secured creditors and will provide $7.0 million to renovate the hotel.

"Canyon is pleased to provide DIP financing that will help Andre re-establish firm financial footing so he can continue to be a leader in the Waikiki hospitality industry," said Bobby Turner, Managing Partner of Canyon Capital Realty Advisors. "Andre is a longtime fixture in the Hawaiian resort hotel industry, and we are proud to have led this complex transaction that will make it possible for him to continue to operate hotels in the Hawaiian Islands far into the future."

Tatibouet has been actively involved in the Hawaii hospitality industry for more than 35 years, including serving as the president of the Hawaii Hotel Association. He founded Aston Hotels & Resorts, a hotel management company in the Hawaiian Islands. His parents were among the pioneers of the hotel industry in Waikiki, opening the 14-room Royal Grove Hotel in 1948.

"I am greatly appreciative of the efforts of the Canyon team, especially Michael Fleischer, who championed the transaction for Canyon," Tatibouet said. "Many lenders would have been unable to close this financing because of the many complications involved in the bankruptcy process, but Canyon stood by me every step of the way. They demonstrated professionalism, determination and business acumen while always being sensitive to my personal situation."

Tatibouet is planning to kick-off a $7.0 million renovation of the Coral Reef Hotel in mid-April. The renovation includes upgrading the hotel's public spaces, all of the guest rooms and may include the construction of a fitness center, business center/conference facility and small spa on the second floor of the hotel.

Tatibouet named Aqua Hotels and Resorts, a company founded by Hawaii hotelier Mike Paulin, to manage the property. Aside from the property being re-flagged as an Aqua Hotel, it will be affiliated with Preferred Hotel's Sterling Hotel Group which is a global collection of contemporary and independent hotels designed to satisfy the needs of the discerning business and leisure traveler. Interiors International, run by renowned Honolulu designer Terry Burke, will design the layouts and select case goods for the renovation of the hotel.

The Coral Reef Hotel renovation comes during an upswing in the Honolulu/Waikiki hotel market. Local hotels have experienced a sharp increase in demand since 2000 due to the loss of more than 1,500 conventional hotel rooms that have been converted into time-share units and luxury condominiums or demolished to make room for new high-end hotels.

The hotel also benefits from its close proximity to Waikiki Beach, the Waikiki Beach Walk (the largest development project ever to be undertaken in Waikiki which involves the rebuilding of eight acres into a vibrant showcase and gathering place), and the International Marketplace which is slated for its first revitalization in three decades.

"Working with Andre is consistent with our company's previous efforts to boost economic development in the Hawaiian islands," said Jonathan Roth, a Principal of Canyon. Over the past 24 months, Canyon has invested more than $150 million in several projects in Hawaii, including the redevelopment of a shuttered hotel on the Kona Coast into the Sheraton Keauhou Bay Resort.

"We are thrilled with the closing of this loan. It not only gives us another high-yielding loan for our portfolio, but more importantly it sets the groundwork for future transactions with Canyon," said Ramsfield President Richard Mandel.

About Canyon Capital Realty Advisors LLC 

Canyon Capital Realty Advisors LLC and its affiliate Canyon Capital Advisors LLC are registered investment advisors and money management firms based in Beverly Hills, Calif., with more than $10 billion of capital under management. Canyon's real estate activities focus on providing debt and equity capital to real estate owners, operators, developers, corporations and entrepreneurs, enabling them to participate in transactions that would have traditionally eluded them due to capital constraints. Canyon has built its reputation on creative underwriting and structuring, reliable commitments, overall professionalism and timely closings. Canyon's real estate funds include the Canyon Value Mortgage Fund and the Canyon-Johnson Urban Funds, a joint venture with Earvin "Magic" Johnson focused on the development of retail and residential properties in densely populated, ethnically diverse communities.

About Ramsfield Hospitality Finance

Ramsfield Hospitality Finance is a Manhattan-based lender established to provide creative financing alternatives for hotel owners and investors. The company structures subordinate and first mortgage loans ranging from $2.5 million to $50.0 million on properties in major U.S. markets. Ramsfield's joint-venture partner is affiliated with Cargill Value Investment, based in Minnetonka, Minnesota.