NEWTON, MA-Hospitality Properties Trust on Thursday said its multinational deal for hotel investments with NH Hoteles SA was on hold after NHH was unable to secure bank approvals needed to move forward with the plan. In a release, locally basedHPT says its expects to enter talks with NHH about possible modifications or alternatives to the transaction originally announced, “but at this time the outcome of any such discussions is uncertain.”

As reported this past February, the $375-million venture between HPT and Madrid-based NHH would involve 10 hotels in Europe, New York City and Latin America. Under the agreement, which would take HPT out of the US and its territories for the first time, the REIT would purchase five Latin American hotels totaling 804 keys from NHH for about $70 million. These hotels would be managed by NHH under long-term contracts for 20 years plus renewal options.

Further, HPT would provide a 170-million euro loan—approximately $222 million—to NHH, which would be secured by first mortgages on four European hotels totaling 1,203 keys. The two companies would also form a joint venture to buy out the ownership interest a 242-key boutique property in New York City, identified by analyst Baird Equity Research as the Jolly Madison Towers at 22 E. 38th St.

In a note to clients, Baird opines that the HPT/NHH deal isn't necessarily a goner. “Though management is unable to comment extensively on the ongoing situation, we believe the setback only means the deal will not go forward as currently written,” according to Baird. “We believe the syndicate, NHH or HPT could cover the relatively modest shortfall left by the bank.” Additionally, the deal could be reworked, “perhaps in a more limited scope.”

Although the roadblock on the NHH deal is a setback, perhaps a temporary one, Baird says it continues to see HPT's story as mainly a positive one. “Solid execution on ongoing renovations and upside on ramping properties coming off recent rebrandings or renovations are much more important to supporting continued share momentum, in our view,” according to Baird.