As always, the track record of the borrower is of paramount importance as is their ability to deal with issues effectively when things don’t go to plan. Ensuring there is at least 30%-35% cash equity in a deal is their favoured position, with a limit of a multiple of EBITDA also factored in. Perhaps surprisingly in a hotel-oriented debt panel, there was a strong appetite for the funding of new developments as opposed to just financing existing assets. Equally surprising was an almost complete lack of impact that UK banks are seeing from Brexit on their ability to do deals in the hotel sector. With only 50 days to go until 29 March, maybe the hotel sector will demonstrate a resilience which the rest of the country could learn from?
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