Morgans Hotel Group has completed a $100 million refinancing of a credit facility secured by the popular Delano South Beach hotel.
The transaction was part of a $450 million refinancing that includes the New York company’s Hudson hotel, Morgans announced Monday. Bank of America and Citigroup Global Markets Realty provided the financing. The new loan matures in February 2016, with three one-year extension options.
Proceeds from the refinancing were used to repay $180 million in outstanding debt secured by the Hudson, pay down $37 million in outstanding debt from a revolving credit facility secured by the Delano, provide cash collateral for a $10 million letter of credit and fund reserves required under the new loan. The rest is available for general corporate purposes and working capital.
Morgans is in the midst of a “strategic plan to improve liquidity, reduce costs and corporate overhead, recapture the entrepreneurial spirit and excitement that was once this company’s hallmark and return Morgans Hotel Group to its rightful place as the leading international boutique hotel platform,” Morgans chairman and interim CEO Jason Kalisman said in the company’s written announcement. — Eric Kalis