Peruvian Brings Novel Hotel Securitization

Peru-based property owner Inversiones La Rioja has priced a $40m domestic market securitization, according to people following the transaction. The 20-year notes with a 10-year grace period are backed by the cash flows and assets of the JW Marriott hotel in Lima, and priced at par with a 7.28% coupon. The transaction, which drew 2.25x demand, saw strong participation from insurance companies and pension funds. Proceeds will go to developing new properties and to pay older debt. Scotiabank managed the transaction, rated AA/AA on a national scale. A person working on the deal says it is the first hotel-based bond in Peru, and likely the first single-asset hotel securitization in LatAm.