Omaha Convention Center Headquarters Hotel

Omaha Convention Center Headquarters

Omaha Convention Hotel Corp.
First Tier Revenue Refunding Bonds
Series 2007

Omaha Convention Hotel Corp.
First Tier Revenue Bonds
Series 2002

The original financing structure included $102.9 million insured senior lien current interest bonds and $6.0 million in subordinate bonds, purchased by the manager and developer. The senior bonds were in part supported by an Appropriation from the City to pay up to 40% of the total debt service on the bonds. The Omaha transaction was the first hotel financing 100% insured by one of the four primary, AAA rated mono-line insurers.

The 2007 restructuring provided the Corporation with significant debt service savings and allowed for projected revenues from Hotel operations to adequately pay future debt service payments and FF&E funding requirements. The City of Omaha has agreed to fund any deficiencies on the Series 2007 Bonds, subject to appropriation. Other accomplishments of the restructuring include: the elimination and cancellation of the developer and manger owned Subordinate Bonds, renegotiation of the Hotel Operating Agreement and the restructuring of certain provisions in the indenture which aim to minimize potential cash flow shortfalls.

The highlights of the resulting benefits and improvements are described below.

  • Approximately $15.4 million in total present value savings
  • Approximately $1.5 million in annual debt service savings
  • Elimination of developer owned Subordinate Bonds and cancellation of manage owned Subordinate Bond
  • Restructuring of Hotel Operating Agreement resulting in $150,000-$200,000 reduction in the annual management fee

In 2010, S&A was hired to act as Hotel Financing Consultant on the City’s expansion financing. The $37.0 million bond issuance financed the 150-room guestroom expansion and renovation of the hotel’s common areas.

Mr. Swerdling led negotiations with the investors, the hotel operator, the developer and the bond insurer for the original financing. Eric Iravani provided day-to-day quantitative support for the expansion and restructuring, and was involved in creating capital structures. In 2010, Mr. Swerdling renegotiated the hotel management contract to provide substantial economic benefits to the City.