Société Générale funds Champs-Elysées Marriott Hotel purchase

Loan partly sold down to five investors

Société Générale has underwritten the financing for Hong Kong’s Kai Yuan Holdings’ €344.5m acquisition of the five-star Marriot Hotel on Champs-Elysées in Paris.

Paris Marriott croppedThe French bank arranged a €175m loan with a defensive financing structure, featuring a relatively conservative LTV of 56% and an interest cover ratio over 2x.

Soc Gen sold down around 70% to five investors: a combination of banks and French debt funds.

Among the five syndication partners was debt fund La Française, which bought a €30m position as one of the final deals for its first, French-focused, debt fund. The €280m vehicle is now fully invested and La Française is working on a second, more opportunistic vehicle with Forum Partners, with a €300m target mainly for France, Germany and the Netherlands.

Also in the line-up were Far Eastern and Middle Eastern banks. Overall the distribution was well spread, with the investors buying positions between €20m and €40m.

There was strong demand for the syndication, said a person with knowledge of the deal, because the landmark asset “has performed extremely well and pricing was pretty good, at well over 200 basis points – a margin not achievable any more”.

The pricing was agreed several months ago and the acquisition and financing closed in mid October and today the margin would be well below 200bps, he said.

According to one of the syndication partners it represented a very attractive prospect “owing to the rare quality of the underlying asset which showed resilience throughout the global financial downturn and remains profitable”.