Millennium Partners Wins Deal of Year Award for $700-Mil, Multi-Hotel Deal

NEW YORK CITY-Financing and constructing six Ritz-Carlton hotels in New York Boston and Washington, DC has earned Millennium Partners the Deal of the Year Award of the 23rd annual International Hospitality Industry Investment Conference held at New York University. The transaction gives the firm ownership of 1,450 Ritz-Carlton rooms, including 1,167 that are new to market.

A $400-million loan led by Dresdner Bank and co-underwritten by Dresdner and DePfa Bank AG, which led a consortium of nine international banks, and by a $100-million funding guarantee from Marriott International, backed the deal. The $400 million covered only 60% of the acquisition costs, which is estimated to be worth more than $700 million. The balance was funded by Millennium and its partners.

The venture also saw the formation of a new investment vehicle, MPE Hotel I LLC, which was capitalized by Millennium’s principles and Victoria, a subsidiary of ERGO, and Provinzial, two German life insurance companies. The arrangement was motivated by conflicting business strategies of Millennium’s equity partners, some of whom were nearing the end of their investment horizons, and others who saw this transaction as a opportunity to refinance major lodging properties at attractive rates.