Bellwether Supports Short Fuse Rescue Capital Opportunity
Bellwether’s institutional knowledge, financial expertise and experience with hotel operations allowed the team to support a private equity client in underwriting a large hotel portfolio of a publicly traded REIT on the brink of bankruptcy due to the COVID-19 pandemic. The result led to our client providing a massive $450mm financing package, ensuring not only the REITs survival, but a capitalization structure that provided a path for future growth.
Snapshot
The Challenge
On the Edge of a Precipice
Publicly traded hotel REIT with an expansive portfolio across 28 states faced unparalleled threats due to the COVID-19 pandemic. By the end of 2020, the company was on the brink of bankruptcy, struggling with liquidity issues and operational hurdles, desperately needing a sizable recapitalization to stave off insolvency.
How We Helped
Strategic Analysis and Robust Financial Diligence
Bellwether rapidly deployed a team of 34 experts to perform an in-depth asset-by-asset analysis of the company’s portfolio. Every asset underwent rigorous operational diligence, a detailed review of planned capital expenditures and evaluation of the underlying market to inform a discounted cash flow analysis all within a tight 10-day timeframe. The individual valuations then informed a holistic investment structure.
The Result
From Brink of Collapse to a Future of Opportunity
Bellwether’s involvement bore significant fruit. In just 30 days, the deal moved from preliminary discussions to securing a $450mm senior financing agreement. This flexible, comprehensive package offered crucial financial security as well as capital for growth opportunities during the pandemic. While Bellwether’s initial role was on the transaction side, Bellwether continued oversight of the investment upon closing to confirm execution of the business plan remained intact. Thanks to our collaborative approach and flexible staffing model, a potential disaster morphed into a success story.
Collaborate with Bellwether To Help You Through the Storm
Need assistance in weathering a disruptive season? Reach out today.
