Midas Asset invests $100 mn in US hotel portfolio-backed debt

Midas Asset Management, a small-sized South Korean fund manager, has invested $100 million in a mezzanine debt secured on 53 hotels across the United States as it is pushing into alternative assets.

It underwrote the debt from MCR Development LLC., a US hotel owner and operator, which raised a total of $650 million in a refinancing package against those hotels, according to investment banking sources on Nov. 6.

The package consists of $550 million senior tranche and $100 million floating-rate mezzanine loan.

Midas Asset launched a domestic fund for the investment which is expected to provide an annual average return of between 7.5% and 8% for up to five years.

MCR had acquired the hotels, valued at $925 million, over the past two years since 2013 and pooled them in a real estate investment trust company.

They include Marriott- and Hilton-branded chains across 14 states, including Texas, Arizona and Virginia, with an average occupancy rate of close to 80%.

MCR owns a $2 billion portfolio of 94 hotels across 67 cities in the United States.

The sources declined to confirm whether Midas is seeking to sell down the debt investment to domestic institutional investors.

By Daehun Kim

daepun@hankyung.com

Photo: Getty Images Bank