In the midst of tightening financial conditions due to rising interest rates in Europe and the US, Blackstone - a world's leading real estate fund - has managed to refinance its Spanish hotel company Hotel Investment Partners (HIP) with 680 million euros, according to CincoDías.
HI Partners is a real estate company that is the largest owner of hotels in Spain, operated and leased by various brands such as AC Marriot, Ritz Carlton, Barceló, Alua, Lopesán and Meliá. Blackstone even defines it as the largest hotel owner in southern Europe, with 73 tourist hotels and 21,500 rooms, mainly in Spain, but also in Italy, Greece and Portugal.
The powerful pull of tourism in the wake of the Covid-19 pandemic has made it easier for Blackstone to find resources for a company that is growing and with open plans to renovate its hotels.
The loan consists of a senior tranche of approximately 475 million with a four-year maturity and an interest rate of Euribor plus approximately 3%. In addition, it is complemented by mezzanine debt (this type of liability usually has an option convertible into equity) of approximately 205 million with a maturity of five years and an interest rate of 7%.
The financing of HIP, led by Alejandro Hernández-Puértolas as CEO, has been led by US and European banks, including Morgan Stanley and Crédit Agricole.
The origin of this real estate company comes from Banco Sabadell, which created it with hotel assets from its balance sheet. In 2017, Blackstone took it over. Although a large part of its portfolio comes from the assets of the now defunct socimi Hispania, a company with a valuation of 2,000 million on which the US fund launched a takeover bid in 2018.
In HIP's accounts for 2021 (the latest filed with the Mercantile Registry), it is explained that in 2017 the real estate company signed a syndicated loan with Credit Suisse and Citi for 346 million, extendable until 2023 and at a cost of Euribor plus 3.5%. A year later, it refinanced and extended this loan, incorporating the Austrian bank Bawag, with two loans of 459 million and 54 million, also extendable until last February. In addition, it signed another mezzanine debt contract also with Citi and Credit Suisse for 93 million at an interest rate of Euribor plus 6.25%.
These accounts also reflect that the company has available financing lines from its shareholder Blackstone (through the subsidiary Halley Bidco), for 250 million over 10 years (until 2028) at an annual interest rate of 3.5%.