Debt backed by the Four Seasons may be downgraded

Standard & Poor’s may downgrade the commercial real estate debt backed by four hotels, including the Four Seasons in New York. The TY Warner Hotels & Resorts properties recorded a 46 percent drop in net cash, according to an S&P note dated Oct. 21, and have since been placed on “credit watch with negative implications.” Their $425 million loan is scheduled to mature in January 2010 and has a one-year extension option, for which it will not qualify before clearing a debt-service-coverage hurdle, S&P said. The decrease in cash flow at the Four Seasons and other luxury hotels could be attributable to an 11 percent drop in occupancy rates for the year ended Dec. 31, 2008, according to S&P. [Bloomberg]