W2007 Grace Acquisition I, Inc. (fka WGCBP)

[Madmartigan]

Last Friday's edition of Commercial Mortgage Alert suggests the following:

"Deutsche Bank and Goldman Sachs have agreed to provide a hefty floating-rate loan to a Goldman fund on the former Equity Inns hotel portfolio. The fund, which controls the REIT that acquired Equity Inns seven years ago, needs to retire a big chunk of debt — believed to be in the neighborhood of $1.25 billion. Although the exact size of the new loan couldn’t be learned, it apparently would be big enough to retire most or all of the existing debt."

One might logically assume that the use of these proceeds would go to retire the traditional debt in-place as well as retire the prefs plus accrued in order to clean-up the capital structure for an eventual exit. Given Goldman's basis in the ~60%+ of the preferred float that they own, they would be DPO'ing at a substantial basis (or paying themselves back a very hefty return).