JLL arranges $126m refinance for hotel resort.Jones Lang LaSalle Jones Lang LaSalle (NYSE: JLL) is a major real estate and money management services firm headquartered in the Aon Center in Chicago, Illinois and the only company in its industry making it into Fortune magazine's list of the 100 Best Places to Work in the U.S. has arranged the refinancing RefinancingAn extension and/or increase in amount of existing debt. of the Four Seasons Resort Nevis located in Nevis, West Indies West Indies, archipelago, between North and South America, curving c.2,500 mi (4,020 km) from Florida to the coast of Venezuela and separating the Caribbean Sea and the Gulf of Mexico from the Atlantic Ocean. on behalf of its client, Hotel Equity Fund V, an affiliate of Maritz Wolff & Co. The 196-key Four Seasons Resort Nevis has long been recognized as one of the best resorts in the world by major travel publications including Conde Nast Traveler and Andrew Harper's Hideaway Report. Jones Lang LaSalle generated strong bids from nine major lenders, including two principal bids not conditioned upon successful securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. or syndication, which ultimately resulted in an unprecedented low cost financing for the borrower. The transaction was awarded to a balance sheet lender, which not only offered a loan with high proceeds at a very competitive spread, but also was able to address key objectives of the borrower, including prepayment flexibility and assumability. "The refinancing retired the existing low leverage, high coupon, traditional loan encumbering the property," said Arthur Adler, managing director and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. for Jones Lang LaSalle Hotels. As a Caribbean transaction, the refinancing was subject to more stringent underwriting criteria than a comparable U.S. hotel. Moreover, leverage levels much above 60% have not been historically available from the traditional Caribbean lending community. To access competitive financing, many structural hurdles had to be resolved. For example, to enhance its ability to efficiently securitize Securitize The practice of a company selling accounts receivables or other debts owed to it. The third party that buys the debt assumes ownership of it and the responsibility for collecting the debts, and keeps the repayments when made. the loan in the future, the lender required political risk insurance, as Nevis does not have a sovereign rating. Also, being in a region prone to hurricanes, Jones Lang LaSalle needed to demonstrate that natural and engineered tropical storm tropical storm n. A cyclonic storm having winds ranging from approximately 48 to 121 kilometers (30 to 75 miles) per hour. tropical storm and hurricane protection systems constructed by the borrower to reduce natural risk have been effective. In addition, the borrower wanted the refinancing to retire existing debt and provide a distribution to the owner. Overall, Jones Lang LaSalle successfully negotiated loan terms that met the borrower's objectives for maximizing proceeds and minimizing cost. |
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