The owner of a hotel portfolio bought for £742M has put up £50M to repay a chunk of the loan secured against the assets to secure covenant waivers, as the sector continues to be heavily impacted by the coronavirus.

A company backed by the Dayan family made the £50M payment toward a £450M loan against a portfolio of 20 UK hotels that operate under the Holiday Inn brand, according to a notice from CBRE, which manages the loan.

It is the second such payment the portfolio owner has made, following a £28M payment in July. In exchange for the payment, the loan won’t go into default if the interest-cover-ratio covenant or net-operating-income debt yield covenant are breached. Both of those covenants are measures of the income the portfolio generates against the level of the debt and interest payments.

If the loan-to-value ratio of the portfolio climbs above 60%, the waivers can be rescinded.

The rules of the latest UK lockdown mean that hotels are not allowed to reopen except in very limited circumstances until 17 May. Combined with lockdowns last year, UK hotels have spent more than half of the last year shut down by law.

The Israeli-headquartered Dayan family bought the portfolio for £742M in 2018 from Apollo Global Management. The purchase was funded by a £450M loan from Goldman Sachs, which was then securitised, and a £70M mezzanine loan.

Other hotel investors such as Thailand’s DTGO have made payments to cure covenant breaches or obtain securitised hotel loan covenant waivers. The Livingstone brothers’ London & Regional is also in talks with debt services to restructure a securitised hotel loan.