Hilton Grand Vacations to launch $1.3 billion term loan B on Monday

By Sara Rosenberg

New York, May 7 – Hilton Grand Vacations is scheduled to hold a lender call at 2 p.m. ET on Monday to launch a $1.3 billion seven-year term loan B, according to a market source.

BofA Securities Inc., Deutsche Bank Securities Inc., Barclays, Credit Suisse Securities (USA) LLC, JPMorgan Chase Bank, Goldman Sachs Bank USA and MUFG are the lead arrangers on the deal.

The term loan has 101 soft call protection for six months, the source said.

Proceeds will be used with $675 million of senior unsecured notes to refinance existing debt in connection with the acquisition of Diamond Resorts International Inc., including senior notes at Hilton Grand Vacations and notes at Diamond Resorts.

Under the agreement, Diamond Resorts is being purchased from Apollo Global Management Inc. and Reverence Capital Partners for 34.5 million shares of Hilton Grand Vacations common stock. The transaction is valued at $1.4 billion.

Upon closing, existing Hilton Grand Vacations shareholders will own about 72% of the combined company and the Apollo Funds will own around 28% of the combined company.

Pro forma leverage will be 6.5x but is expected to return to below 3x within 24 months through significant cash flow generation.

Closing is targeted for the summer, subject to customary conditions, regulatory approvals and shareholder approval.

Hilton Grand Vacations is an Orlando, Fla.-based timeshare company. Diamond Resorts is a timeshare operator.

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