Diamond Resorts International, Inc. Announces Closing of $470 Million Credit Facility & Issuance of Notice of Redemption of S...
May 09 2014 - 11:28AM
Business Wire
Diamond Resorts International, Inc. (NYSE:DRII) (“Diamond” or
the “Company”) today announced the closing of its previously
announced $470 million senior secured credit facility with Credit
Suisse AG, as administrative agent and collateral agent (the “New
Credit Facility”), which includes a $445 million term loan issued
with 0.50% of original issue discount and a $25 million revolving
line of credit. Borrowings under the New Credit Facility bear
interest, at Diamond’s option, at a variable rate equal to LIBOR
plus 450 basis points, with a one percent LIBOR floor applicable
only to the term loan, or an alternate base rate plus 350 basis
points.
“We are pleased to have completed this transaction, which
significantly improves our balance sheet and substantially reduces
our interest expense,” stated Alan Bentley, Executive Vice
President and Chief Financial Officer. “The favorable terms we
secured are a testament to our unique business and our strong
growth profile.”
The Company used the proceeds of the term loan portion of the
New Credit Facility, as well as approximately $5.4 million of cash
on hand, to fund the approximately $419 million redemption amount
for Diamond Resorts Corporation’s 12.0% Senior Secured Notes Due
2018, pay off loans, including accrued interest and fees, of
approximately $19.5 million relating to prior strategic
acquisitions and pay costs of approximately $9.7 million associated
with the refinancing transactions.
The Company irrevocably deposited approximately $419 million of
the term loan proceeds with Wells Fargo Bank, National Association,
as trustee for the Senior Secured Notes to fund a redemption of the
Senior Secured Notes on June 9, 2014, pursuant to a Notice of
Optional Redemption that was sent to the trustee and holders today.
The making of this deposit represents a prepayment of the
indebtedness evidenced by the Senior Secured Notes, together with
the applicable prepayment premium and accrued and unpaid interest
to the redemption date, and effected a release of all collateral,
which collateral was then transferred to Credit Suisse AG, as
collateral agent for the New Credit Facility. As a result, we no
longer have any obligations, and are no longer subject to any
restrictions or limitations, under the indenture governing the
Senior Secured Notes.
Credit Suisse Securities (USA) LLC and J.P. Morgan Securities
LLC acted as lenders, joint bookrunners and joint lead arrangers
with respect to the New Credit Facility.
About Diamond Resorts International®
Diamond Resorts International, with its network of more than 300
vacation destinations located in 34 countries throughout the
continental United States, Hawaii, Canada, Mexico, the Caribbean,
South America, Central America, Europe, Asia, Australia and Africa,
provides guests with choices and flexibility as they design their
dream vacation, whether they're traveling an hour away or around
the world. Our hassle-free, relaxing vacations give guests a truly
memorable experience every time, for a lifetime.
Diamond Resorts International manages vacation ownership resorts
and sells vacation ownership points that provide members and owners
with Vacations of a Lifetime™ through 93 managed resorts, 206
affiliated properties and four cruise itineraries. To learn more,
visit DiamondResorts.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements,
including statements regarding the New Credit Facility and related
refinancing transactions and other statements regarding the current
expectations of Diamond Resorts International, Inc. (the “Company”)
about its prospects and opportunities. These forward-looking
statements are covered by the "Safe Harbor for Forward-Looking
Statements" provided by the Private Securities Litigation Reform
Act of 1995. The Company has tried to identify these forward
looking statements by using words such as “expect,” “anticipate,”
“estimate,” “plan,” “will,” “would,” “should,” “could,” “forecast,”
“believe,” “guidance,” “projection,” “target” or similar
expressions, but these words are not the exclusive means for
identifying such statements. The Company cautions that a number of
risks, uncertainties and other factors could cause the Company's
actual results to differ materially from those expressed in, or
implied by, the forward-looking statements, including, without
limitation, adverse trends or disruptions in economic conditions
generally or in the vacation ownership, vacation rental and travel
industries; adverse changes to, or interruptions in, relationships
with the Company's affiliates and other third parties, including
termination of the Company's hospitality management contracts; the
Company's ability to maintain an optimal inventory of vacation
ownership interests for sale overall, as well as in specific
Collections; the Company's ability to sell, securitize or borrow
against its consumer loans; decreased demand from prospective
purchasers of Vacation Interests; adverse events or trends in
vacation destinations and regions where the resorts in our network
are located; changes in the Company's senior management; the
Company's ability to comply with regulations applicable to the
vacation ownership industry; the effects of the Company's
indebtedness and its compliance with the terms thereof; changes in
the interest rate environment and their effects on the Company’s
outstanding indebtedness; the Company's ability to successfully
implement its growth strategy; and the Company's ability to compete
effectively. For a detailed discussion of factors that could affect
the Company's future operating results, please see the Company's
filings with the Securities and Exchange Commission, including the
disclosures under “Risk Factors” in those filings. Except as
expressly required by the federal securities laws, the Company
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, changed
circumstances or future events or for any other reason.
Media:Diamond Resorts International®Stevi Wara,
1-702-823-7069media@diamondresorts.comorInvestors:Sloane and
CompanyJoshua Hochberg, 1-212-486-9500jhochberg@sloanepr.com
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