Three Korean investors to buy $87 mn debt backed by US resorts: report

Three South Korean institutional investors will buy 100 billion won ($87 million) worth of mezzanine debt secured on a portfolio of 15 water park resorts of North America's Great Wolf Resorts Inc. in the first investment in an overseas water park resort chain by a Korean investor, a newspaper reported on Oct. 1.

Each of the unidentified investors, including a retirement savings fund and a mutual finance company, will invest around 30 billion won in the debt for an expected annual return of 6% to 7% on average for a five-year period, according to the Maeil Business Newspaper.

They are buying the debt from JPMorgan and other investors in North America.

The mezzanine note is part of $1.5 billion debt collateralized by water park resorts of Great Wolf, the largest US operator of indoor water parks, located across the US and Canada, valued at $2.1 billion.

Great Wolf is owned by Centerbridge Partners L.P. after the private equity firm acquired the resort chain in 2015 for reportedly $1.35 billion, including debt. Its first lodge hotel resort opened in 1997 in Wisconsin.

“This asset is distinguished from commercial buildings which local institutional investors had focused on, and meaningful in that it helps diversify investment portfolios,” an unnamed investment banking source was quoted as saying by the daily.

Vestas Investment Management pooled the 100 billion won from the three Korean institutional investors to invest in the debt on their behalf.