New Issue: Sunterra $75 million convertibles yield 3.75%, up 30.5%

Nashville, March 24 - Sunterra Corp. sold $75 million of 20-year convertible notes at par to yield 3.75% with a 30.5% initial conversion premium, via sole bookrunner Merrill Lynch & Co.

The Rule 144A deal priced with a yield at the middle of price talk of 3.5% to 4.0% and a richer initial conversion premium than talk of 23.5% to 27.5%.

Interest payments will be collateralized with Treasuries for three years

After funding the security for the coupons, the Las Vegas based club-affiliated resort owner said remaining proceeds would be used for general corporate purposes, including the reduction of debt under its existing revolving loan facility.

Terms of the deal are:

Issuer:	Sunterra Corp.
Issue:	Convertible senior subordinated notes
Bookrunner:	Merrill Lynch & Co.
Amount:	$75 million
Greenshoe:	$20 million
Maturity:	March 15, 2024
Coupon:	3.75%
Price:	Par
Yield:	3.75%
Conversion premium:	30.5%
Conversion price:	$16.00
Conversion ratio:	62.5027
Call:	Non-callable for 3 years, then with 150% trigger for 4 years
Put:	In years 7, 10 and 15
Price talk:	3.5-4.0%, up 23.5-27.5%
Pricing date:	March 23, after the close
Settlement date:	March 30
Distribution:	Rule 144A

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