Diamond Resorts hikes talk on $525 million six-year secured notes; pricing Thursday

By Paul A. Harris

Portland, Ore., July 23 – Diamond Resorts International Inc. hiked price talk in its $525 million offering of six-year senior secured notes (B3/B-) in a deal that had been expected to price on Wednesday but was pushed back to Thursday, market sources say.

The latest talk has the notes pricing with a 9¾% coupon at 98.889 to yield 10%. The new talk pushes the yield 50 basis points up from the midpoint of earlier official yield talk in the 9½% area, which was also the initial guidance.

As reported, the Diamond Resorts offering came with reverse inquiry amounting to two-thirds of the deal size, according to a New York-based junk bond trader.

Nevertheless, the order book remained below deal size late Wednesday, the trader added, noting that there were sizable orders for the notes wide of original talk in the 9½% area.

Left lead bookrunner RBC Capital Markets LLC will bill and deliver. Barclays is a joint bookrunner. Apollo and Natixis Securities Americas LLC are co-managers.

The Rule 144A and Regulation S for life notes come with two years of call protection.

The Las Vegas-based timeshare company plans to use the proceeds to repay a portion of its 7¾% first-lien secured notes and a portion of its term loan B, both due September 2023, and to fund cash to its balance sheet.

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