Debt Portfolio Advisory

As a lender, you may be facing an increasing number of sub-performing and non-performing loans. Whether you seek a comprehensive assessment of lodging and hospitality-related risks or require support in monitoring the performance of your loan portfolio, our team is prepared to assist you.

With over 20 years of experience monitoring more than 300 hotel loans, we have developed a comprehensive approach to debt portfolio advisory in the hospitality sector. After understanding your specific needs, we offer the following services, fully customizable to your requirements:

Debt Portfolio Review

Our initial review provides a detailed evaluation of the risks associated with your lodging and hospitality loans, offering insights into potential performance challenges for each loan. We categorize loans into performing, sub-performing, and non-performing groups and suggest appropriate advisory approaches based on these categories.

Using our proprietary software Advanced Debt Monitoring (ADM©), we analyze the operational cost structure of each hotel and apply scenario analyses to estimate cash flows available for debt service under various conditions.

Our review ranks each hotel and associated loan according to these analyses. This process can be performed collaboratively with your team or independently by our experts. The goal is to provide you with actionable information to support informed decision-making.

Portfolio Monitoring

• For performing loans, we offer quarterly reviews of collateral operational performance based on remote studies, including updated rolling projections of cash flow availability.
• For sub-performing loans, monthly assessments of operational and head office performance are conducted, accompanied by extended cash flow forecasts under multiple revenue scenarios. We prioritize maintaining open communication with borrowers to support loan stabilization.
• For non-performing loans, we assist in preparing strategic exit plans designed to maximize recovery potential.

Advisory on Debt-to-Equity Conversions

In situations where debt repayment challenges arise, converting debt into equity may be considered. This process can be partial or full and typically results in changes in ownership structure. We provide advisory support throughout such processes, focusing on the strategic and operational aspects to support successful restructuring outcomes.

Our Advisory Process Includes:

• Facilitating discussions between lenders, borrowers, and any relevant parties under appropriate legal guidance.
• Supporting the development of turnaround action plans aimed at restoring operational performance and improving asset valuation.
• Advising on the implementation of operational improvement plans with defined milestones.
• Assisting in preparing for asset disposition by providing market insights and valuation perspectives.

Our objective is to support you in effectively overseeing your debt portfolio related to lodging and hospitality assets through practical and actionable advisory services designed to optimize performance and recovery potential.