PPHE Hotel Group is continuing its debt maturity extension programme with a £182.4 million loan from AIG to refinance its flagship Park Plaza Westminster Bridge hotel.
The loan, which funded this week, includes a £10 million floating rate tranche and £172.4 million of 12-year money, fixed at 3.785 percent. PPHE said the new facility is part of an ongoing programme for the long term refinancing of certain group assets, following the refinancing of Park Plaza Victoria London with Cornerstone in April 2016.
The security for the latest refinancing is PPHE’s ownership interests in the 499-room hotel and pledges over the shares in the various companies that own the interests in the asset. It is the group’s first financing with US insurance lender AIG Asset Management.
In a stock exchange announcement, PPHE said an independent valuation for the refinancing valued the interests at £370.0 million compared to a book value of £144.1 million at 31 December 2015. The hotel is well-known to UK property lenders as the venue for the Association of Property Lenders’ annual dinner.
The new facility will be used to repay £104.2 million of a Bank Hapoalim Luxembourg (SA) loan which has a maturity date of 1 June 2018, and the balance will be used for general corporate purposes.
Boris Ivesha, president & chief executive officer of the company, said: “The current favourable market conditions have enabled us to continue our ongoing programme for the long term refinancing of assets within the Group.
“This agreement marks the start of a new relationship with AIG Asset Management and enables us to further invest in our flagship hotel, Park Plaza Westminster Bridge London, as we remain focused on growing our market share and delivering great customer service.”
The London-listed Dutch PPHE group operates 38 Park Plaza, Art’otel and Arena Turist hotels in Europe. Last month it agreed £87 million of senior debt from Cornerstone Real Estate Advisors to refinance the 229-room Park Plaza Victoria in London at a fixed interest rate of 3.41 percent for 10 years.