Fairmont to hold senior agents round on Wednesday for $3.7 billion loan; retail meeting targeted for May

By Sara Rosenberg

New York, April 18 - Fairmont Hotels & Resorts Inc. has scheduled a senior managing agents meeting for Wednesday to launch its proposed $3.7175 billion credit facility and anticipates holding a general syndication launch sometime in May, according to a market source.

Citigroup, Credit Suisse and Eurohypo are the lead banks on the deal, with Citi the left lead.

The facility consists of a $300 million revolver talked at Libor plus 135 basis points, a $2.6525 billion term loan A talked at Libor plus 135 bps, a $465 million term loan B and a $300 million term loan C, the source said.

Price talk on the term loan B and the term loan C is expected to surface when the deal gets closer to launching to retail investors.

Proceeds from the credit facility will be used to help fund the purchase of Fairmont by Kingdom Hotels International and Colony Capital at a price of $45.00 per share in cash.

Kingdom and Colony then plan to combine the Fairmont and Raffles Hotels & Resorts portfolios following the completion of the transaction, transforming the companies into a luxury global hotel leader with 120 hotels in 24 countries. Fairmont will remain an independent hotel management and ownership company with headquarters in Toronto, and Raffles, based in Singapore, will also retain its independent brand identity.

The total value of this transaction, including debt and the combination with Raffles, is expected to be $5.5 billion, or $3.9 billion, without giving effect to the Raffles combination.

Kingdom and Colony have provided Fairmont with an equity financing commitment of $1.385 billion to help fund the transaction as well.

Closing of the acquisition is subject to customary conditions, including regulatory approvals and is expected to close in the second quarter, shortly after receipt of shareholder and court approvals. The closing of the transaction is not subject to any financing condition.

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