Marriott Vacations driving by with $400 million five-year notes; initial talk mid-6% area

By Paul A. Harris

Portland, Ore., May 6 – Marriott Vacations Worldwide Corp. plans to price a $400 million offering of senior secured notes due September 2025 (expected ratings Ba3/BB-) in a Wednesday drive-by, according to market sources.

Initial talk has the notes coming to yield in the mid-6% area, according to a bond trader based in New York.

BofA Securities Inc. is the left bookrunner. J.P. Morgan Securities LLC, SunTrust Robinson Humphrey Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC are the joint bookrunners.

Fifth Third Securities Inc., HSBC Securities (USA) Inc., MUFG, BNY Capital Markets Inc., Synovus Securities Inc. and U.S. Bancorp Investments Inc. are the co-managers.

The Rule 144A and Regulation S for life notes become callable after two years at par plus 50% of the coupon. They feature a two-year 40% equity clawback at par plus the coupon and a 101% poison put.

The Orlando, Fla.-based company intends to use the proceeds for general corporate purposes.

The issuing entity will be Marriott Ownership Resorts, Inc., a wholly owned subsidiary of Marriott Vacations, a vacation ownership, exchange, rental, and resort and property management services provider.

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