Moody’s could drop Diamond Resorts

Moody's Investors Service said it placed Diamond Resorts Corp.’s B1 corporate family rating, B1-PD probability of default rating and B1 senior secured bank credit facilities ratings on review for downgrade.

The SGL-1 speculative grade liquidity rating remains unchanged.

Moody’s said the review for downgrade was prompted by Diamond Resorts’ announcement that affiliates of Apollo Global Management, LLC will be acquiring the company for $30.25 per share in a transaction valued at about $3.4 billion including Diamond Resorts’ existing corporate and securitized debt.

The agency estimates that this represents nearly a 10 times EBITDA multiple based upon Moody's expectation for Diamond Resorts’ 2016 EBITDA and about a 26% premium over its closing share price on June 28.

The transaction is expected to close during the second half of 2016.

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