Diamond Resorts upsizes to $1 billion, adds $400 million secured notes; pricing Aug. 15 week

By Paul A. Harris

Portland, Ore., Aug. 11 – Diamond Resorts International, Inc. upsized its notes offering to $1 billion from $600 million, while downsizing its concurrent term loan to $800 million from $1.2 billion, according to a syndicate source.

The upsizing of the notes offering comes in the form of a new $400 million tranche of seven-year senior secured notes (expected ratings B1/B+).

The secured notes will rank pari passu with the term loan.

The secured notes, along with the previously announced $600 million tranche of eight-year senior unsecured notes (Caa1/CCC+), are set to price early in the week ahead.

RBC Capital Markets is the left bookrunner for the Rule 144A for life offering. Barclays and Jefferies LLC are the joint bookrunners. Natixis and Apollo are the co-managers.

The notes in both tranches come with three years of call protection.

Proceeds will be used to fund the leveraged buyout of the company by Apollo Global Management LLC and to refinance certain existing Diamond Resorts International debt.

The unsecured notes offering ran an Aug. 1 to Aug. 4 roadshow and was subsequently delayed when the company elected to restate earnings.

Prior to the merger the issuing entity will be Dakota Merger Sub, Inc. Following the merger the issuer will be Diamond Resorts International, which is a Las Vegas-based hospitality and vacation ownership company.

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