China Merchants Bank contributes to a $300 million USD syndicated loan for the Cindat Hersha Manhattan Hotel Portfolio 2018 Refinancing Project

Project narrative

On February 6, 2018, a two-bank syndicate — the New York Branch of China Merchants Bank Co., Ltd. and UBS AG — entered into a $300,000,000 USD senior mortgage loan agreement with seven Delaware-incorporated special purpose vehicles (SPVs) — HCIN Maiden Hotel Associates, LLC, HCIN Water Street Associates, LLC, HCIN Chelsea Grand East Associates, LLC, HCIN Herald Square Associates, LLC, HCIN Duo Three Associates, LLC, HCIN Duo Two Associates, LLC, and HCIN Duo One Associates, LLC — that are wholly-owned by Delaware-incorporated Cindat Hersha Owner JV Associates, LLC, wholly-owned by Cindat Hersha Owner JV LLC — a Delaware-incorporated joint venture (JV) jointly owned by Hersha Hospitality Trust, a Maryland-incorporated real estate investment trust investing in hotels headquartered in Harrisburg, Pennsylvania and listed on the New York Stock Exchange (30% equity stake) and Cindat Capital Management Limited, a Cayman Islands-incorporated international investment manager independently-managed and owned by its institutional and individual shareholders (including state-owned China Cinda Asset Management Co., Ltd.) headquartered in Beijing, China (70% equity stake) — for the Cindat Hersha Manhattan Hotel Portfolio 2018 Refinancing Project. This loan carried a term period of 36 months (three years), with two 12-month extensions at the borrowers' option and a floating interest rate based on LIBOR or a base rate (the highest of a prime rate or the Federal Funds Rate plus 0.50%) plus a margin capped at 3% calculated on an actual basis and payable monthly. This loan was secured by (i.e. collateralized) by a first mortgage against the borrower's fee interest in the seven-hotel portfolio and a first priority assignment of leases associated with the properties as charged by the borrowers. This loan was non-recourse, albeit with Hersha Hospitality Trust as a non-recourse carve-out guarantor. The proceeds were used for refinancing purposes on February 6, 2018 for existing debt on a 1,087-hotel room portfolio of seven premium limited service hotels located in Manhattan, New York City, New York, namely the Holiday Inn Express Times Square at 343 West 39th Street, the Candlewood Suites Times Square at 339 West 39th Street, the Hampton Inn Times Square at 337 West 39th Street, the Hampton Inn Chelsea at 108 West 24th Street, the Hampton Inn Herald Square at 59 West 35th Street, the Holiday Inn Wall Street at 51 Nassau Street, and the Holiday Inn Express at 126 Water Street; specifically, it fully repaid the remaining balance of a April 29, 2016 term loan and project loan from Natixis Real Estate Capital LLC, which were then terminated. Concurrent with entry to the $300 million USD loan, CMTG Lender 12 LLC entered into a $85,000,000 USD mezzanine loan with Cindat Hersha Owner JV Associates, LLC to refinance mezzanine debt from April 29, 2016.