Shinhan provides $100 mn mezzanine loan on Brookfield’s US hotel

  • 2019-10-14

Shinhan Investment Corp. has provided a $100 million mezzanine loan on Brookfield’s resort hotel in Florida which recently secured $560 million in debt refinancing.

The loan on The Diplomat Beach Resort in Hollywood carries a coupon rate of 4-5% with a term of five and a half years, according to sources with knowledge of the matter last week. It was first reported by the Asia Economy, a South Korean news outlet.

Brookfield purchased the 39-story beachfront hotel for $460 million in 2014 and rebranded it as part of the Hilton’s Curio Collection. The hotel opened in 2002.

The funding appears to be the mezzanine piece of the $560 million debt package offered by Morgan Stanley, JPMorgan and Wells Fargo to refinance the resort. It was not immediately confirmed.

The mezzanine piece is secured by equity interests in Brookfield and its subsidiary, Thayer Lodging Group, the Commercial Observer reported in late September.

Shinhan provided the mezzanine funding via Meritz Alternative Investment Management Co. Ltd. for resale to domestic investors.

Excluding the $100 million mezzanine loan, Morgan Stanley provided $276 million, and JPMorgan and Wells Fargo each contributed $92 million in the deal for a total of $460 million. It was originated on Sept. 19 and is expected to close on Oct. 9, according to the report.

The $460 million loan carries a 4.44 percent floating-rate coupon and has a two-year term, with three, one-year extension options.

Separately, Shinhan had provided $30 million mezzanine financing on three US shopping malls owned by Brookfield via Morgan Stanley earlier this year.

It seems to be part of the $295 million mortgage offered by Morgan Stanley in April on the hotels: Lynnhaven Mall in Virginia Beach, Virginia; Coronado Center in Albuquerque, New Mexico; and Governor’s Square in Tallahassee, Florida.

By Hyun-il Lee

<Edited by Yeonhee Kim>

(Photo: Getty Images Bank)