News for the Hospitality Executive
Affiliate of Ramkota Companies, Inc. Obtains $76
million Term Loan to
Refinance Existing Debt and Make a Distribution to Equity Holders
November 3, 2008 - Regency Midwest Ventures Limited Partnership, Sioux Falls, SD, announced that on Friday, October 31st, it closed on a $76,000,000 Syndicated Term Loan with U.S. Bank National Association acting as Lead Arranger. The Regency Midwest Ventures partnership was formed by entities contributing 14 hotels in 8 states in exchange for partnership interests in the new venture. Regency Hotel Management, LLC is the management company and the General Partner is wholly owned by The Ramkota Companies, Inc.
Closing pricing on the transaction was one-month LIBOR plus 300 bps with the rate to Regency locked for 4 and 5 years via derivative swaps. The proceeds of the Term Loan were used to refinance existing debt and make a distribution to equity holders. Along with U.S. Bank, other institutions providing financing for this Syndicated Term Loan included First Western Bank & Trust, First National Bank - Pierre, First PREMIER Bank, CorTrust Bank, and Bank of North Dakota.
Greg Schjodt, President of Regency Hotel Management said “Combining hotels throughout a large geographical region reduced the risk of any one market downturn and by reducing the risk, value was created. This reorganization also allows for increased staff efficiencies and greater economies of scale. Managing hotels in the greater Midwest region definitely has some advantages compared to other regions of the country.”
Robert Thimjon, Chief Financial Officer for Regency Midwest said “In the current credit markets, we are very pleased to complete this transaction. It is through relationships with these lenders that have allowed us to continue to operate our business as usual despite difficult and volatile financial markets.”
Thimjon also noted that Kelly Midwest Ventures Limited Partnership, a 17 hotel property partnership, completed a similar Syndicated Term Loan for $75,000,000 in April 2008, also with U.S. Bank acting as Lead Arranger.
Dave Rozenboom, Regional President for U.S. Bank, conveyed the long-standing significance of U.S. Bank’s relationship with Ramkota and its related entities, indicating “We have enjoyed a 23 year banking relationship with the Ramkota group of companies and their management team. Through the years, we have developed a strong and mutually beneficial relationship that has stood the test of several business cycles. During this period of extreme disruption in the credit markets, it’s a real testament to the management team’s consistently strong performance and the depth and quality of our relationship to be able to successfully complete this financing package.”
Robert Thimjon, Chief Financial Officer
Dave Rozenboom, Regional President
|Also See:||Milestone Hotel Investments, Inc. and Regency Hotel Management, Inc. Purchase Eight Clubhouse Inn Hotels and Six Wyndham Garden Hotels / July 2000|