Citigroup gets burned on Caribbean resort

| 08/09/2010

(WSJ): In 2006, Citigroup originated a big construction loan for a Viceroy resort described by developer Kor Hotel Group as "an exquisite rendition of the residential resort concept" on Anguilla. Four years later, after construction delays and cost overruns, Citigroup is getting out of this corner of the Caribbean at a huge loss. The bank is selling its mortgage on the Viceroy Anguilla to Barry Sternlicht’s Starwood Capital Group at a hefty discount, according to Anguillan Chief Minister Hubert Hughes and others familiar with the talks. The debt has a face value of close to $300 million, these people said. Starwood is paying $105 million, according to Hughes.

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