South Korean firm buys debt on Cosmopolitan of Las Vegas

Cosmopolitan Las Vegas

Mirae Asset Daewoo Company, the brokerage arm of one of South Korea’s leading mutual fund houses, has bought $95-million in mezzanine debt on the Cosmopolitan of Las Vegas, which is owned by the Blackstone Group. The private equity firm was reportedly raising $1.8 billion in a new refinancing package on the hotel and casino.

Blackstone was expected to use most of the proceeds to pay off a $1.55 billion debt from late 2016 and replace with a lower interest rate loan ahead of maturity.

Mirae Asset, part of Mirae Asset Financial Group, has completed the payment for the floating-rate mezzanine note with a maturity of up to seven years, the company said. It is expected to sell it down to other domestic investors.

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In late 2016, Hyundai Investments Co. Ltd., a South Korean asset manager, collected 93 billion won from South Korean institutional investors to invest in floating-rate mezzanine debt on the Cosmopolitan hotel and casino.

The mezzanine portion, part of the $1.55 billion package, was expected to deliver an annual return of 5 to 6 percent. It was paid off late last year before maturity, according to industry sources in Seoul.

The Las Vegas-based Cosmopolitan hotel and casino was first purchased by Blackstone from Deutsche Bank in a $1.73-billion acquisition deal back in 2014. According to industry reports, over the years after the deal was completed, the value of the property rose to a little less than $3 billion due to the massive boost in room and occupancy rates after a renovation process estimated at $200 million was completed in 2016.

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