Global hotel and hostel operator Generator Group has successfully refinanced around € 750M of debt with Ares Management, Värde Partners and Waterfall Asset Management.
The transaction, which involved 13 jurisdictions, featured a combination of European debt facilities (denominated in EUR, GBP and DKK) and private bond issuances of circa. €440 million for Generator’s European arm, which was backed by Ares Management, and U.S. debt facilities of approximately US $330 million for Generator’s U.S. arm, which was backed by Generator’s existing lenders Waterfall Asset Management and Värde Partners.
Owned by Queensgate Investments, Generator Group consists of 21 hotels and hostels offering more than 12,000 beds across 17 tier one cities under the Generator and Freehand brands.
The company derives approximately 95 per cent of EBITDA from owned real estate.
All Generator properties are independently branded and operated by a fully integrated in-house management team.
Generator Group reports 2023 earnings of EUR 225M (against EUR 180M for fiscal year 2019) and EBITDA of EUR 75M (compared with EUR 50M for fiscal year 2019), an almost 40 per cent increase from 2022.
Generator’s strong performance post-Covid has enabled Queensgate to refinance Generator’s global debt with direct lenders in a challenging financial market.
Queensgate acquired the European arm of Generator in March 2017, with traditional senior financing from lenders including Société Générale, London Branch and HSBC Bank plc, as well as mezzanine financing from Apollo Global Management and later made a series of well-timed acquisitions of U.S. assets throughout 2018 and 2019, including acquiring Freehand Hotels in October 2019, and expanding with the Paramount Hotel in New York.
Generator Group is now armed to continue it’s strategy of superlative organic growth, asset heavy expansion and asset light expansion.
Jason Kow, CEO Queensgate Investments, says: “This is one of the largest and most innovative real estate financings that the market has seen in years, involving multiple outgoing lenders across 10 countries.
We are hugely grateful for our new partnership with Ares in Europe and our strengthened existing partnership with Varde and Waterfall in the US”.
Brown Rudnick assisted Queensgate with the arrangement and structuring of the global financing, as well as the legal execution.
Queensgate advises and manages around £3 billion worth of assets through the suite of Queensgate Investments Funds.
This is one of the largest and most innovative real estate financings that the market has seen in years, involving multiple outgoing lenders across 10 countries.
Queensgate differentiates itself by its flexible, nimble and non-institutional approach to producing superior risk adjusted returns.
Generator is Europe’s fastest growing boutique accommodation brand with hostels and affordable boutique hotels located in the most central locations across Europe and North America including Dublin, London, Copenhagen, Hamburg, Berlin, Venice, Barcelona, Paris, Amsterdam, Stockholm, Rome, Madrid, Miami and Washington D.C.
Partners
Ares Management is a leading global alternative investment manager established in 1997.
It offers clients primary and secondary investment solutions across the credit, private equity, real estate and infrastructure asset classes.
Launched in January of 2022, The Ares European Real Estate Debt team has originated and closed on over £1.1 billion of real estate loans across Europe.
Waterfall Asset Management is a global alternative investment manager founded in 2005, focused on specialty finance opportunities within asset-backed credit, whole loans, real assets and private equity.
Waterfall is headquartered in New York, with additional offices in London, Dublin, and Hong Kong.
Waterfall has approximately US $12.5 billion in assets under management.
Värde Partners is a leading global alternative investment firm specializing in credit and credit-related assets.
Värde currently manages approximately US $13 billion in assets with teams in North America, Europe, and Asia Pacific focused on Corporate & Traded Credit, Real Estate, and Financial Services & Diversified Private Credit.
Brown Rudnick is an international law firm that serves clients around the world from offices in key financial centres across the UK, Europe and the US.
