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January 10, 2020  

Mirae Seeks $4 Billion of Debt for Hotel Deal

Mirae Asset Global Investments is circulating a request for $4 billion of financing to back its acquisition of a massive hotel portfolio.

The South Korean firm struck a deal last summer to buy 15 luxury hotels across the U.S. from China’s Anbang Insurance for roughly $5.8 billion. Mirae has tapped JLL to line up a debt package split into fixed- and floating rate pieces of roughly $2 billion each. Both mortgages would run for five years.

The financing deal would close in unison with the property sale, probably late in the first quarter. The leverage on the proposed debt would be around 69%.

The floating-rate debt likely will be originated by a syndicate of banks for their balance sheets, while the fixed-rate loan would be divided among a handful of commercial MBS shops. JLL is pitching the assignment to both types of lenders. The broker also represented Anbang on the property sale.

The Anbang portfolio includes the JW Marriott Essex House New York, the Loews Santa Monica Beach Hotel, the Westin St. Francis San Francisco and the Four Seasons in Jackson Hole, Wyo. Mirae put down a 10% deposit, Bloomberg reported in September.

Anbang and Mirae might have reached an agreement earlier last year had it not been for the discovery of a bizarre scheme in which an unidentified individual created fake deeds in an effort to fraudulently transfer ownership of some of the hotels. A routine title search found that at least four of the properties had been transferred to a shell company, according to The Wall Street Journal.

Anbang acquired the 15 properties as part of a larger hotel portfolio it bought from Blackstone in 2016 for $5.5 billion. Blackstone had acquired the portfolio months earlier via its purchase of Strategic Hotels & Resorts, a hotel-focused REIT.

The sale by Anbang comes after China’s insurance regulator seized control of the company in 2018 and charged its chairman, Wu Xiaohui, with fraud and abuse of power. Anbang still owns the Waldorf Astoria in Manhattan, which fetched the highest price ever paid for a U.S. hotel property when the insurer bought it in 2014 for $1.95 billion.