Fortress to Sell Caribbean Hotels in $465 Million Muni-Bond Deal

Fortress Investment Group plans to sell two resorts on St. Thomas in the US Virgin Islands through a deal that will be financed by municipal bonds, and which will allow the territory to ultimately acquire the property.

The investment firm is selling Frenchman’s Reef — which includes a 392-room Westin and a 94-room boutique hotel — to an affiliate of the Community Finance Corp., an Arizona nonprofit. CFC will acquire the property using proceeds from a roughly $465 million muni sale scheduled for next month through the Virgin Islands Hotel Development Financing Corp. The offering also includes a $15 million private placement.