Blackstone Real Estate Partners is tapping the securitization market for a cash-out refinancing of The Cosmopolitan of Las Vegas hotel and casino.
A $1.04 billion first mortgage loan on the property serves as collateral for an offering of commercial mortgage bonds from JPMorgan and Deutsche Bank.
This loan pays only interest, and no principal, for its entire term. Together with $513 million in mezzanine debt, it is being used to refinance existing debt of $1.3 billion and return approximately $234.5 million of equity to the sponsor.
DBRS expects to assign ratings on the notes ranging from AAA to BB.
In its presale report, the ratings agency cited the property's high-quality, its "irreplaceable" location on the Las Vegas Strip and relatively low leverage. DBRS calculates its loan-to-value ratio at 67.5%, which is higher than the LTV of 42.9% based on the appraiser's estimate of as-is market value.
The subject property is a 3,005-room luxury hotel and casino completed in 2010 and situated in an excellent mid-Strip location between the Bellagio and MGM Resorts International's CityCenter.
The collateral amenities include, but are not limited to, over 250,000 square feet of convention and banquet space facilities, 111,500 square feet of casino space, 96,000 square feet of entertainment space (including a 3,200-capacity multi-use entertainment venue), 23,500 square feet of retail space, 50,000 square feet of spa and fitness facilities, and a five-level underground parking garage.
