Narrative
Full Description
Project narrative
On June 24, 2021, City Express Hotels signed a syndicated credit contract worth MXN 3,827,000,000 ($191,700,000) with Scotiabank, Inbursa, BBVA, and Actinver in order to refinance three of its previous loans. The loan had a maturity of 5 years, a grace period of 1 year, and an interest rate based on the TIIE 28 with a 4.25% margin. The loan was intended to help the company restructure its debt and recover from the impact of the Covid-19 pandemic on its operations. As of December 31, 2021, only MXN 2,754,000 had not yet been drawn down by City Express Hotels. The contract included a stipulation that City Express Hotels must carry out a cash capitalization or sell assets worth MXN 1 billion at minimum. This requirement was met in early 2022. Then, on June 21, 2022, it was announced that the Industrial and Commercial Bank of China (ICBC) had joined the loan syndicate, contributing MXN 228 million. The terms of the loan otherwise remained unchanged. As of December 31, 2022, MXN 17,010,000 had not yet been drawn down by City Express Hotels. Then, on October 21, 2022, City Express Hotels announced the sale of its five brands to Marriott for $100,000,000. A portion of the funds from this sale were used on May 25, 2023 to make an MXN 800 million prepayment on the outstanding debt owed by City Express Hotels to the loan syndicate. Then, on August 21, 2023, City Express Hotels announced that it had signed a refinancing agreement worth MXN 3,050,000,000 with Scotiabank, Actinver, Banorte, Monex, Banco Ve por Más, Bancoppel, BBVA, and ICBC (captured via Record ID#102990). As of December 31, 2023, City Express Hotels had paid off the entirety of what it owed ICBC for its MXN 288 million contribution to the original syndicated loan. However, it is unclear if ICBC's contribution of MXN 288 million was fully drawn down.
Staff comments
1. For the time being,AidData has coded the commitment date as the date on which City Express Hotels announced ICBC's accession to the loan syndicate. 2. Some sources state the total amount of the syndicated loan following ICBC's accession was MXN 3,939,388,810.95 (see https://www.bmv.com.mx/docs-pub/eventemi/eventemi_1200041_1.pdf). However. it is unclear if this figure was based on the outstanding amount as of ICBS's accession, if the amount of the syndicated loan was less than the reported figure of MXN 3,827,000,000, or if ICBC took on debts previously held by other creditors. This issue warrants further investigation. 3. AidData estimates the interest rate by adding the 6-month average TIIB at the time of commitment (8.16%) plus the applicable margin (4.25%), which equals to 12.41%. For more information about TIIE, visit the Mexican government's site: https://www.banxico.org.mx/SieInternet/consultarDirectorioInternetAction.do?sector=18&idCuadro=CA51&accion=consultarCuadroAnalitico&locale=en.