The Virgin Islands Hotel Development Financing Corporation has completed a Series 2025 hotel revenue bond financing to support the acquisition of the Frenchman’s Reef resorts on St. Thomas, Government House announced in a press release issued Tuesday.
The transaction involves approximately $448.6 million in hotel revenue bonds issued across multiple tranches, including senior-lien, subordinate-lien and taxable series, the release said. The financing supports the acquisition of The Westin Beach Resort and Spa at Frenchman’s Reef and the Morningstar Buoy Haus Beach Resort at Frenchman’s Reef, Autograph Collection, according to the press release.
The bonds are being issued by the Virgin Islands Hotel Development Financing Corporation, a subsidiary conduit issuer established under the Virgin Islands Public Finance Authority. Proceeds are loaned to the borrower, CFC-FR, LLC, whose sole member is Community Finance Corporation, a 501(c)(3) nonprofit, to cover acquisition costs and other permitted expenses, including reserves, capitalized interest and issuance costs, the press release stated.
The bonds are structured as special, limited obligations payable solely from revenues identified in the bond proceedings. They are not a general obligation of the government of the Virgin Islands and do not pledge the territory’s taxing power or general revenues, the release stated.
The financing structure is designed so that once the debt is fully retired, ownership of the Frenchman’s Reef property would transfer to the people of the Virgin Islands. At that point, the government would have the option to lease or sell the property through standard public processes, the release stated.
The bond issuance followed the public hearing process required under Section 147(f) of the Internal Revenue Code, including a TEFRA hearing held virtually on Dec. 8, 2025, it stated.
