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Ty Warner Facing Credit Watch on Four Luxury Hotels’ Debt

Four Seasons Biltmore Resort, San Ysidro Ranch among properties on S&P notice over $425 million loan

A credit watch has been issued for the bond backing a $425 million loan on four hotels owned by Montecito billionaire Ty Warner, including the Four Seasons Biltmore Resort and the San Ysidro Ranch, Noozhawk contributor Jeff Harding reported on his Daily Capitalist blog late Tuesday.

The Montecito hotels and their sister properties — the Four Seasons Hotel New York and Las Ventanas al Paraiso in Los Cabos, Mexico — have a $425 million loan due in January.

According to a Bloomberg report, Standard & Poor’s may downgrade the commercial real estate debt backed by the four luxury hotels because of a drop in cash flow from the properties. Bloomberg said net cash flow was $29.4 million in the 12 months through June — 46 percent below S&P’s expectations and leading to the “credit watch with negative implications” declaration. The bond-rating company said the hotels’ occupancy rate was 58 percent in 2008, down from 69 percent a year earlier.

Noozhawk publisher Bill Macfadyen can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk.

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