Credit Suisse has taken pole position to provide finance for a £520m portfolio of Travelodge hotels.
The Swiss institution faced final-round competition from Royal Bank of Scotland and earlier efforts from rivals including Goldman Sachs, for the deal.
The bank is expected to provide a facility at a 65-70% loan-to-value ratio, reflecting a loan of £338m-£364m, priced at 200 to 300 basis points.
Goldman Sachs, Avenue Capital and GoldenTree Asset Management bought the 144 nationwide hotels for around £520m in an initial all-cash purchase last month. The buyers each took a 33% equity stake.
The budget hotels, which came out of the Grove portfolio, were sold by consortium owners Prestbury Investment Holdings, Tom Hunter’s West Coast Capital and the Reuben Brothers’ Aldersgate Investments. Lloyds Banking Group, which held an equity and debt position, was also part of the consortium.
The acquiring partnership is the existing owner of Travelodge after rescuing the hotel company two years ago with a debt-for-equity restructuring.
The acquisition, from Dubai International Capital, included writing off £235m of debt.
One source called the refinancing “an aggressive task” as the 2012 restructuring meant there was not a long operational track record on which to base the facility.
The hotel portfolio generates £35.5m in annual rent with a weighted average unexpected lease term of 29.4 years. Almost half the rent comes from hotels in the capital and the South East.
The deal takes place the same month as Credit Suisse appointed Derek Rich to spearhead its European real estate origination efforts, although it predates the former Deutsche Bank lender joining the bank last week.
Credit Suisse, once one of the most aggressive European real estate lenders, is on an expansion drive after a post-crisis hiatus.
All parties declined to comment.
bridget.oconnell@estatesgazette.com
