Sheraton Myrtle Beach Convention Center Hotel

SAG was the financial advisor to the Myrtle Beach Convention Center Hotel Corporation and the City of Myrtle Beach regarding the financing of a hotel under a tax exempt structure through a special purpose tax-exempt entity. SAG led the transaction process addressing such issues as creating the non-profit entity, development team selection, bond structuring, cash flow modeling, rating agency and bond insurer presentations, and contract negotiations. SAG worked closely with the legal team and represented the owner on transaction documents, including the qualified management agreement, technical services agreement, operator loan (key money), pre-opening agreement, room block agreement, official statement, trust indenture, and other transaction related agreements.

The original financing structure utilized two traunches of bonds. The first traunch of $45 million was supported solely by the profits of the hotel. The second traunch of $20 million was also supported by hotel profits but included a credit enhancement by the city-wide hotel tax. After a troubled hotel opening due to economic and operational issues, SAG refinanced the first traunch of bonds postponing principal payments and lowering interest costs by incorporating the city-wide hotel tax credit enhancement feature utilized in the second traunch. The refinancing and management change enabled the hotel to meet cash flow expectations.

Project Components: 402-room Convention Hotel
Project Value: $65 million