Diamond Resorts sets Thursday launch for $415 million credit facility

By Sara Rosenberg

New York, March 26 - Diamond Resorts LLC has scheduled a bank meeting for Thursday to launch its proposed $415 million senior secured credit facility, according to a market source.

Credit Suisse is the lead bank on the deal.

The credit facility consists of a $25 million four-year revolver, a $250 million five-year first-lien term loan and a $140 million six-year second-lien term loan, the source said.

According to filings with the Securities and Exchange Commission, pricing on the revolver and the first-lien term loan will be Libor plus 350 basis points if the borrower is unrated, Libor plus 325 bps if B2/B corporate credit ratings are obtained and Libor plus 300 bps if B1/B+ corporate credit ratings are obtained.

The filings also said that pricing on the second-lien term loan will be Libor plus 750 bps if the borrower is unrated, Libor plus 725 bps if B2/B corporate credit ratings are obtained and Libor plus 700 bps if B1/B+ corporate credit ratings are obtained.

The revolver has a 50 bps commitment fee.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

Up to $60.9 million of the first-lien term loan will be available on a delayed-draw basis for 50 days and up to $34.1 million of the second-lien term loan will be available on a delayed-draw basis for 50 days.

Proceeds will be used to fund the acquisition of Sunterra Corp. for $16.00 per share in cash through a tender offer. The total value of the transaction is about $700 million, including $375 million of existing Sunterra debt.

Diamond Resorts is a Las Vegas-based developer, manager, marker and seller of vacation ownership properties.

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