Portfolio Financing Case Study - Royal Holiday

• Neptune was successful in packaging and underwriting the opportunity, taking it out to the debt markets and procuring term sheets that met all of Royal Holiday’s goals
   
• Given the strong availability of hotel debt at historically compelling interest rate levels, Neptune proposed a and was successfully able to structure the recapitalization to satisfy a host of strategic and financial objectives including:
  • Maximizing the loan proceeds while limiting annual debt service payments thus significantly lowering the overall cost of capital at the corporate level
  • Mitigating interest rate risk
  • Providing proceeds for significant renovation and expansion of the six resort hotels, thus increasing the room count by almost fifty percent
  • Providing liquidity for future acquisitions (“equity out”)

• This transaction is particularly noteworthy given it is financing of Mexico resort assets requiring substantial renovation and expansion on a non-recourse basis with strong borrower terms
   
• Given its complexity and pricing relative to precedent transactions, that this is the most significant Mexican real estate transaction ever structured through the U.S. securitized markets.  While precedent transactions involving U.S. loans on Mexican real estate do exist, the borrowers were generally U.S. domiciled companies, the collateral were ‘luxury’ hotel assets and the terms were less advantageous than this financing
   
• The transaction is notable in terms of attracting broad interest from international lenders and given the size of the proposed financing.  Neptune has been successful in achieving stronger terms for Royal Holiday than were given for the Four Season Mexico City, the Four Season Punta Mita, or the One & Only Palmilla (Los Cabos, January 2005)
   
• In fact, Neptune was able to provide the borrower with less expensive capital than Mexico itself receives as a sovereign nation in the global markets
   
• Royal Holiday would not have been able to meet their goals without our effective complementary capital advisory services