Transaction:
Austin Bergstrom Landhost Enterprises, Inc.
Financial Restructuring and Debt Advisory for Austin Airport Hilton Hotel
Austin Bergstrom Landhost Enterprises, Inc. (ABLE), a non-profit public facilities corporation acting as an instrumentality of the City of Austin to operate the Hilton Austin Airport Hotel, issued bonds to finance the conversion of the Air Force administration building at Bergstrom Airforce Base into a full-service hotel as part of the transfer to the base from military to civilian use. For a variety of reasons, ABLE defaulted on the bonds and remained in default for an extended period of time.
Our Approach
After being engaged to initially assess the situation, Harney advisor was appointed as Chief Restructuring Officer to help ABLE find a resolution to its bond debt default, its contentious financing relationship with the majority holder of such bonds, and develop a plan to reinvigorate the property given the pressing needs for capital investment.
Deutsche Bank was the largest holder of ABLE’s bond debt until a sale of its position to distressed debt buyer which took a much more aggressive approach to managing the credit.
Outcomes
A settlement was achieved with the vulture bondholder fund to refinance $60MM of bond debt for $30MM through the issuance of $53MM of new bond debt, which provided approximately $20MM for capital expenditures.
The additional $20MM of capex was used to renovate every guestroom, all ballrooms and other meeting spaces, as well as the pool and other amenities.
After completing the refinance, Harney team member stayed on to oversee both the planned property renovations as well as the unplanned catastrophic market disruption caused by COVID-19. Milligan still serves as President of ABLE.
Services & Roles
Special Situation Advisory
Strategic Assessment
Interim Management / Chief Restructuring Officer
Debt Advisory
Financial Advisory
*Some engagements may have been performed by team prior to joining Harney Capital.
