Intrawest secures financing at 11th hour

[BushMogulMaster]

Well, looks like they're good to go for now.

October 23, 2008

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SAM Magazine—Vancouver, B.C., Oct. 23, 2008—Intrawest successfully completed an agreement to refinance a $1.7 billion loan which was due today when it received unanimous support from its existing lender group.

“We are very pleased to have reached an agreement with our lenders, particularly given the challenges of the global credit markets," said Bill Jensen, chief executive officer at Intrawest. "The support Fortress and our lenders have shown underscores their confidence in Intrawest and will enable us to continue to execute on our long-term strategic plans. Intrawest has great assets, a sound business model and a solid track record."

Fortress Investment Group has been working to refinance $1.68 billion in Intrawest debt for the past month, but the credit crisis made negotiations with its creditors extremely difficult. Intrawest has been the most recent, and visible, resort to be caught up in the current debt crisis, but it is not the only one. And most observers predict it will have lots more corporate company before the crisis is over.

As a result of the refinancing, Intrawest will likely see a dramatic rise in the cost of its debt. The current loans have been selling at 70 cents on the dollar, suggesting an interest rate of about 9 percent, vs. the previous rate of 6.4 percent. To refinance the full $1.68 billion at the higher rate would cost about $40 million more, according to one analysis.

 

[eastcoastpowderhound]

ouch, 9%...if my mortgage rate hit 9% I'd be living in my car.

 

[TheBEast]

The debt markets are essentially shut down.....there will be many defaults to come in the next 12-24 months. Real question for Intrawest is what do the new terms look like? You don't just get a free pass to refi that type of debt load without paying for it.

 

[RootDKJ]

glad to read this