Daily News: May 12, 2014

Credit Suisse Agents $470MM Diamond Resorts Facility

Diamond Resorts International announced the closing of its previously announced $470 million senior secured credit facility with Credit Suisse as administrative agent and collateral agent, which includes a $445 million term loan issued with .50% of original issue discount and a $25 million revolving line of credit.

The company irrevocably deposited approximately $419 million of the term loan proceeds with Wells Fargo Bank as trustee for the senior secured notes to fund a redemption of the Senior Secured Notes on June 9, 2014, pursuant to a notice of optional redemption that was sent to the trustee and holders.

Credit Suisse Securities and J.P. Morgan Securities acted as lenders, joint bookrunners and joint lead arrangers with respect to the new credit facility.

The making of this deposit represents a prepayment of the indebtedness evidenced by the senior secured notes, together with the applicable prepayment premium and accrued and unpaid interest to the redemption date, and effected a release of all collateral, which collateral was then transferred to Credit Suisse AG, as collateral agent for the New Credit Facility.

Borrowings under the new credit facility bear interest, at Diamond’s option, at a variable rate equal to LIBOR plus 450 basis points, with a one percent LIBOR floor applicable only to the term loan, or an alternate base rate plus 350 basis points.

“We are pleased to have completed this transaction, which significantly improves our balance sheet and substantially reduces our interest expense,” stated Alan Bentley, EVP and CFO. “The favorable terms we secured are a testament to our unique business and our strong growth profile.”

The company used the proceeds of the term loan portion of the new credit facility, as well as approximately $5.4 million of cash on hand, to fund the approximately $419 million redemption amount for Diamond Resorts’ 12% senior secured notes due 2018, pay off loans, including accrued interest and fees, of approximately $19.5 million relating to prior strategic acquisitions and pay costs of approximately $9.7 million associated with the refinancing transactions.