Diamond Resorts Said to Boost Terms on Loan for Apollo LBO

Diamond Resorts International Inc. reduced the size and is offering to pay higher interest on a loan backing its $2.2 billion buyout by Apollo Global Management LLC after receiving a cool reception from investors.

The operator of timeshare properties cut the size of a $1.2 billion loan to $800 million and sweetened its terms to attract investors, according to a person with knowledge of the offering who asked not to be identified because the information is private. To make up for the reduction, the company is now proposing to sell $400 million in secured bonds along with its existing plans to raise $600 million of unsecured debt.

The financing-- both the bonds and the loan-- received strong demand with the latest adjustments, according to another person familiar with the matter.

The reduced loan will pay interest at six percentage points more than the London interbank offered rate, up from a five percentage-points spread initially offered. The price on the loan has also been lowered to 98 cents on the dollar from 99 cents.

The financing for Diamond Resorts was revived this week after the company posted its delayed second-quarter earnings Monday. Marketing of the financing was put on hold last week after the company reported that it had to delay its earnings to restate financial results starting in 2014.

Erica Bartsch, a representative for Las Vegas-based Diamond Resorts, didn’t immediately respond to phone calls and e-mails seeking comment. An Apollo representative couldn’t be immediately reached for comment.

Apollo’s acquisition is due to close in the fall of 2016, the company said in the statement on Monday, which also outlined a 28.5 percent decline in second-quarter net income to $25.5 million. Revenue increased 6.1 percent to $245.7 million, according to the statement.

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