Citi, ING REF close EUR 150m restructuring with MSREF VII

Citigroup Global Markets and ING Real Estate Finance have closed a debt restructuring for BRE / Hospitality Europe Holding, a company controlled by Blackstone Real Estate Partners (BREP) International Fund II and BREP Fund V.

The company owns nine upscale hotels located in gateway cities across Europe. The hotels are owned subject to management contracts with leading global hotel operators including Starwood, Hilton and Hyatt.

The restructuring involved the splitting-up of a EUR 480 mln original senior facility into a EUR 330 mln senior facility and a newly created EUR 150 mln mezzanine facility. The EUR 330 mln senior facility continues to be supported by a 5-strong syndicate including Aareal Bank, Citibank International, Deutsche Post Bank, ING Bank and Swiss Re Capital Management and Advisory.

The EUR 150 mln mezzanine facility was placed entirely with Morgan Stanley Real Estate Fund VII Global (MSREF VII) in one of the largest real estate mezzanine loan placements of the year.

Citi and ING REF acted as joint-coordinators of the restructuring and joint-bookrunners of the mezzanine facility.

The restructuring extends the maturity of the company's debt by 5 years to help it get through the low point in the hotel cycle. The portfolio, which comprises 3,423 rooms in Amsterdam, Brussels, Frankfurt, Paris, Prague and Stockholm, has enjoyed a significant pick-up in trading conditions and financial performance in 2010.