HotelsCoastal Devon
£12.4m
74-key trading hotel, acquisition and refurbishment. Senior at 62% LTV, £2.1m capex tranche against certified works.
Issue — two years of part-closure in the accounts.
What we fund
Hotel transactions we fund
Trading and non-trading, single asset and portfolio, freehold and long leasehold.
01
Acquisition of trading hotels with two or more years of accounts
02
Vacant and part-trading assets bought for repositioning
03
Refurbishment, rebrand and repositioning capex programmes
04
Conversion to aparthotel or serviced apartment use
05
Portfolio refinance across multiple trading assets
06
Transitions between management agreements or franchise brands
07
Refinance of a maturing facility on a stabilised asset
08
Opco/propco separations and sale-and-leaseback structures
Structures
Structures we place
Hotels are underwritten as trading businesses as well as property. The structure reflects which of the two carries the value.
Senior against EBITDA
55–65% of value assessed on maintainable trade, sized on a multiple of adjusted EBITDA with debt service cover tested at a stressed rate.
Senior against vacant possession
Where trade is disrupted or absent, sized against VP or bricks-and-mortar value with a shorter term and a defined stabilisation plan.
Ring-fenced capex facility
A committed capex tranche drawn against certified works and monitoring surveyor sign-off, separated from the acquisition advance.
Mezzanine behind senior
Used to bridge the gap between senior and sponsor equity on repositioning plays, usually 12 to 24 months to stabilisation.
Underwriting
What lenders test
Hotel credit is more forensic than investment lending. Three areas decide the outcome.
Adjusted, maintainable EBITDA
Credit rebuilds the P&L: management charges added back, exceptional and closure periods normalised, FF&E reserve deducted. The figure lenders size against is rarely the figure in the accounts.
Operator and brand covenant
Who runs it, on what agreement, and what happens if they leave. A franchise or management agreement with step-in rights for the lender materially improves terms.
The vacant possession floor
Even on a trading asset, credit tests the bricks-and-mortar value if the business stops. A wide gap between trading value and VP value caps leverage.
Track record
Selected hotel transactions
HotelsEdinburgh
£26m
Refinance and rebrand of a 140-key city-centre hotel, senior sized on adjusted EBITDA with a £3.5m capex facility.
Issue — brand transition mid-term.
General locations, clients unnamed. Completed facility sizes, illustrative only — not an indication of terms available to you.
Questions
Common questions
General information on how these facilities are structured and placed. Not advice, and not an indication of terms.
Can you fund a hotel that is not currently trading?
Yes. Vacant or part-trading assets are sized against vacant possession value rather than EBITDA, with a shorter term and a defined route to stabilisation or sale.
How do lenders treat disrupted trading accounts?
Closure and refurbishment periods are normalised out and the P&L is rebuilt to a maintainable figure. Evidence of the disruption and of recovered trade is what moves the assessment.
Is refurbishment capex funded separately?
Usually. Capex sits in a committed tranche drawn against certified works with monitoring surveyor sign-off, rather than being advanced on day one.
Do you place portfolio facilities?
Yes, across multiple trading assets with cross-collateralisation and release provisions where individual disposals are planned.
Enquire
Send us the asset
Keys, tenure, trading position and price is enough for a first view. A senior advisor replies directly.
Direct line
+44 (0)20 [ 0000 0000 ]
Also