Some of the largest belly flops following the Great Recession were in the Hotel sector, and interestingly, we're seeing two of those spectacular failures come back into the market this month. Red Roof Inn is out in a new issue deal (which we will publish an update on as soon as it prices), and Extended Stay was in the WSJ this morning as it filed for an IPO.
You'll recall Extended Stay, a 680 property hotel chain, was purchased by Lightstone for $8 billion, went through Chapter 11, and was picked up by Centerbridge/Paulson & Co/Blackstone for $3.9 billion in 2010. The current owners have approximately $3.6 billion in debt part of which is in a 2010 deal.
In the original CMBS loan default, everyone sued everyone - even the special servicers involved ended up suing each other. We posted numerous updates about it as it played out. The potential buyers sued, the creditors sued, the Fed owned a big chunk via Bear Stearns... it was ugly. Of course, the day it first showed up in a deal many CMBS players were scratching their heads wondering how the deal got done in the first place.
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2 comments:
CDOs are back too it seems, thanks to DBRS. How they can rate 60% of a pool as AAA when 47% of it has yet to be identified (not to mention the Chandler loan which hasn't even closed) boggles the mind.
http://www.dbrs.com/research/259342/dbrs-assigns-provisional-rating-to-rait-2013-fl1-trust.html#
did anyone check out Barcap's weekly last week? It explains why Bloomberg's credit support levels are increasingly wrong, because they don't account for under-collateralization. For CSMC 07-C2 B, on a BWIC this week, the three analytics providers all show different numbers
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