Generator Group has successfully completed a €750 mln global refinancing with Ares Management, Värde Partners and Waterfall Asset Management.
The transaction featured a combination of European debt facilities and private bond issuances of around €440 mln for Generator’s European arm, which was backed by Ares Management, and US debt facilities of circa $330 mln (€307 mln) for Generator’s US arm, which was backed by Generator’s existing lenders Waterfall Asset Management and Värde Partners.
Jason Kow, CEO Queensgate Investments said: 'This is one of the largest and most innovative real estate financings that the market has seen in years, involving multiple outgoing lenders across 10 countries. We are hugely grateful for our new partnership with Ares in Europe and our strengthened existing partnership with Varde and Waterfall in the US.'
Queensgate Investments, which acquired the European arm of Generator in March 2017, has been linked with the rumoured sale of the hotels group in recent times. It was also reported to have secured financing for the hotels and hostels group from both sides of the Atlantic in April of this year.
Queensgate said that Generator’s strong performance post-Covid has enabled the business to now refinance Generator’s global debt with direct lenders in a challenging financial market.
Generator Group consists of 21 hotels, some 12,000 beds across 17 tier one cities, includes the Generator and Freehand brands, and enjoys 95% of EBITDA from owned real estate.
All Generator properties are independently branded and operated by an in-house management team. Generator Group 2023 earnings were €225 mln (vs €180 mln in 2019) with EBITDA of €75 mln (vs €50 mln in 2019). The earnings represented an uptick of around 40% compared with 2022.
Queensgate financed the original deal for Generator with traditional senior financing from lenders including Société Générale, London Branch and HSBC Bank, as well as mezzanine financing from Apollo Global Management. The firm and later made a series of acquisitions of US assets throughout 2018 and 2019, including the purchase of Freehand Hotels in October 2019, and expanded with the Paramount Hotel in New York.
Brown Rudnick assisted Queensgate with the arrangement and structuring of the global financing, as well as the legal execution.
