Hilton Grand firms $1.3 billion term loan B at Libor plus 300 bps

By Sara Rosenberg

New York, May 20 – Hilton Grand Vacations finalized pricing on its $1.3 billion seven-year term loan B (Ba1/BB/BB+) at Libor plus 300 basis points, the low end of the Libor plus 300 bps to 325 bps talk, according to a market source.

Furthermore, the original issue discount on the term loan firmed at 99.5, the tight end of the 99 to 99.5 talk, the source said.

As before, the term loan has a 0.5% Libor floor and 101 soft call protection for six months.

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.

Proceeds will be used with $850 million of senior notes to refinance debt in connection with the acquisition of Diamond Resorts International Inc., including senior notes at Hilton Grand Vacations and notes at Diamond Resorts.

The notes were upsized from $675 million to repay a revolving credit facility draw.

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.

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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