Morgan Stanley Real Estate Investing (MSREI) is to keep hold of the keys to a giant Japanese hotel portfolio after months of negotiating with its lenders resulted in a refinancing deal.
The platform, led in Japan by country head Yoshihiko Shigenari, is reported to have successfully agreed a refinancing deal on its 13-hotel strong ANA portfolio acquired from All Nippon Airways for ¥280 billion (€2.45 billion; $3.4 billion) in 2007 in what was one of the largest portfolio acquisitions the country has seen.
The firm borrowed ¥225 billion from Citigroup and Shinsei Bank when it bought the hotels but, according to a report by Reuters, the value of the assets have fallen below that of the debt since.
It was feared MSREI could lose the keys to the assets, which includes the ANA Intercontinental Tokyo. The original loans taken out against the assets matured in April this year and despite MSREI managing 60-day extension beforehand it was unclear if a further solution would be reached. The new loans are reported to have a five year maturity.
The refinancing has seen Citigroup withdraw as a lender, making Shinsei Bank the lead lender on the assets. Shinsei and other banks including Aozora Bank and OCBC from Singapore are understood to have assumed Citi’s position.
The hotels were purchased by MSREI’s $8 billion Morgan Stanley Real Estate fund VI, a vehicle which has suffered large write-downs as it was majority invested during the boom years leading up to the credit crunch and subsequent global economic downturn.