Newark Reporter

Newark-based Prudential Financial did not respond to questions about whether it will abide by a newly founded hotel industry group's lending standards amid the ongoing COVID-19 pandemic that has gutted the hospitality industry.

Prudential Financial, Inc did not respond to Newark Reporter questions about lending standards recently issued by HOTELSTogether, itself recently formed by hotel owners following government-mandated shutdown of the hospitality industry.

"Loan servicers must help hotel owners protect the long-term value of their businesses for employees and our communities, lenders and bondholders, and other stakeholders," HOTELSTogether says on the landing page of its website. "This should include flexible repayment plans until positive cash flows are restored. HOTELS Together has developed 'Fairness in Hotel Lending Standards,' a balanced lending standard that addresses the needs of hotel borrowers while preserving asset values for our lenders."

Without those standards, hotel owners may face bankruptcy as the hospitality industry hasn't received the sort of government aid and bailouts that many lenders have, HOTELSTogether officials say.

The nation's leisure and hospitality industry has been the business sector hardest hit by the ongoing pandemic, according to a report issued by the American Hotel and Lodging Association (AHLA). The industry sustained a as many job losses as construction, government, manufacturing, retail, education and health services combined, according to the report issued earlier this month.

The hotel industry endured a loss of 7.7 million jobs, or 47 percent of total positions, in one-month net decline in payrolls, according to the AHLA report, which cited data from the U.S. Bureau of Labor Statistics.

The hotel industry is "on the brink of collapse," according to a separate AHLA report.

HOTELSTogether's multi-point Fairness in Hotel Lending Standards includes no additional costs levied on borrowers, including no default interest rate, special servicer or related fees, extension fees or late fees.

Other points in the lending standard include automatic approval of relaxed Capex, Funding of PIP, or FF&E Reserves; loan repayment and prepayable at any time without penalty or defeasance; 90-day forbearance and lender protected cash management.

Newark Reporter asked whether Prudential Financial would publicly agree to abide by the Hotel Industry Covid Crisis Fairness in Hotel Lending Standards as promulgated by HOTELSTogether.

Newark Reporter also asked whether Prudential Financial Inc has offered to waive principal or interest payments to borrowers during the coronavirus pandemic or if hotel owners and their employees should bear the full brunt of the crisis.

Prudential has declined to respond at the time of this report.