Mezzanine Loan

Overview:

• 180-key asset located in Frankfurt, Germany, opening 11 January 2026. To be operated under the Unbound Collection by Hyatt brand.

• The borrower needed to refinance a mezzanine loan which Pygmalion structured whilst working with the senior lender to simultaneously extend the service construction loan.

• The mezzanine facility was provided for two years, with a one-year extension at the borrower’s discretion.

Execution:

Construction Phase (2024-2026)

• Follow execution of outstanding works

• Follow the handover of the building

• Monitor the execution of the pre-opening budget

• Monitor the financial performance

Operational Phase (2026 – 2027)

• Operational review

• Monitor capital expenditure

• Legal and stakeholder management

• Loan compliance

• Monitor hotel and investment market

Sourcing

• Pygmalion Capital sourced the opportunity to refinance a mezzanine loan linked to a hotel under construction in Frankfurt through a debt broker.

• Hotel expertise was required to underwrite the transaction within three days. Following which Loan Terms were agreed, to allow for completion of the project.

Downside protection

Loan-to-own structure: Pygmalion has the right to enforce on shares in the event of default. In such an event, Pygmalion would hold “golden shares” that confer a controlling position.

Pygmalion would effectively own the asset at 60% of cost and could either enforce a sale or continue operating.