Debt Restructuring of Blackstone's Hilton Deal

I read the article on WSJ.com about Blackstone's discussions with lenders on Hilton's deal. This article clearly illustrates how Blackstone has dealt with its debt restructuring with lenders. Blackstone still has cash on hand; that's why they can make a new equity infusion combined with the extension of the debt maturity date, debt-equity swap, buyback of outstanding debts at a discount etc. I guess loan covenants such as LTV and/or DSCR has been already hit; therefore, Blackstone is forced to restructure its debts before the maturity of loans come due.

I could easily imagine that Hilton's operations are heavily hit by the global recession. Hotel's ADR can be defined as the rent set forth for the "one-day" lease agreement, judging from the viewpoint of the property business, so it is can be much more impacted by the economy than the rent of office and residential properties, which is usually defined as a long-term contract.

Getting back to the Hilton's case, it is not so easy for other real estate private equity managers which run the comingled property funds to follow the suit with Blackstone, I believe. It is mainly because they can hardly get an OK from all equity investors on additional equity commitments. Challengeｓ and difficulties will continue with property investment managers.