Diamond slates marketing for $600 million deal, to price next week

By Paul Deckelman

New York, July 28 –Diamond Resorts International, Inc. gave details about the marketing effort for its planned $600 million offering of eight-year senior notes (Caa1/CCC+).

The company will be presenting its deal to prospective investors via a four-day roadshow starting on Monday in the New York and New Jersey area, a syndicate source said on Thursday.

The two-day marketing effort there will include a group luncheon on Tuesday afternoon in Manhattan concurrently with a conference call, another source said.

The roadshow then continues in Boston on Wednesday and then moves on to the West Coast of the United States on Thursday.

Syndicate sources said the deal’s pricing is expected to take place during the Aug. 1 week.

News of the deal first surfaced in the junk bond market on Wednesday.

Proceeds will be used to help fund the acquisition of Diamond Resorts – a Las Vegas-based hospitality and vacation ownership company – by New York-based private equity company Apollo Global Management LLC for $30.25 per share or $2.2 billion. That all-cash offer was announced on June 29 and is expected to close over the next few months.

Prior to that acquisition by Apollo, the bonds’ official issuer will be Dakota Merger Sub, Inc.; after the merger, Diamond Resorts, Inc.

The bond proceeds will also be used to refinance existing debt of Diamond Resorts International and to pay transaction-related fees and expenses.

Besides the new notes, financing for the acquisition will also include a $1.3 billion credit facility, comprised of a $1.2 billion seven-year covenant-light term loan B and a $100 million five-year revolving credit facility, as well as about $1.06 billion in equity.

The bond offering, which will have three years of call protection, will be brought to market via RBC Capital Markets Corp. the left bookrunner, with Barclays Capital Inc. and Jefferies LLC as joint bookrunners.

PSP Capital Partners and Natixis Securities are co-managers on the offering.

-Paul A. Harris and Sara Rosenberg contributed to this story

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