Citi and ING Real Estate Finance close €150million mezzanine placement with MSREF VII (NL/UK)

On November 30, 2010, Citigroup Global Markets Limited ('Citi') and ING Real Estate Finance ('ING REF') successfully closed a debt restructuring for BRE/Hospitality Europe Holding BV ('the Company'), 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 bifurcation of a €480-million original senior facility into a €330-million senior facility and a newly created €150-million mezzanine facility. The €330-million senior facility continues to benefit from the support of a five-strong syndicate including Aareal Bank AG, Citibank International Plc, Deutsche Post Bank AG, ING Bank N.V. and Swiss Re Capital Management and Advisory. The €150-million 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 five 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.

Source: ING Real Estate

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