Diamond Resorts International announced the completion of the second amendment and first incremental assumption agreement to the company’s existing credit agreement. The second amendment provides for a $150 million incremental term loan made as part of the company’s senior secured credit facility, which had an outstanding balance of approximately $425 million prior to the incremental term loan facility.
The company received approximately $144 million in proceeds on the closing which was issued with 2.0% original issue discount and bears the same maturity date of May 9, 2021, and interest rate as the term loans in the existing senior secured credit facility. That interest rate, at Diamond Resorts’ option, is LIBOR plus 450 basis points, with a 1.0% floor, or an alternate base rate plus 350 basis points.
The proceeds of the incremental term loan, which replaces a substantial portion of the approximately $167.5 million in cash paid by the company in its previously disclosed acquisition of the vacation ownership business of Gold Key Resorts, will be used for general corporate purposes and to pay costs related to the closing of the transactions contemplated by the second amendment.