After securing a $2.8 billion CMBS deal to support their $3.18 billion acquisition of Kerzner International, private equity firms Providence Equity Partners and Colony Capital have teamed up with bank duo Credit Suisse and Deutsche Bank to arrange a $575 million credit facility to further support the transaction.
A CLO manager noted that the bank deal was professed to be much bigger before the equity firms secured the $2.8 billion CMBS deal, which provided a big portion of the acquisition's financing. The CMBS piece was said to make sense, "given it is real estate that the private equity firms are buying," the investor said. The new debt is structurally subordinate to the CMBS deal, he added.
Kerzner is the developer, operator and owner of the luxury resort complex - The Atlantis - in Paradise Island, the Bahamas. Additionally, Kerzner operates in the five-star, deluxe-end of the resort market with locations in the Bahamas, Mauritius, Dubai, the Maldives and Mexico under the brand One&Only. The company is also the developer for Mohegan Sun in Uncasville, Conn., which is currently operated and owned by the Mohegan Tribal Gaming Authority. Providence, Colony Capital and Kerzner did not return calls by press time.
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