Diamond Resorts International plans to issue $200 million of bonds backed by vacation timeshare loans, according to Standard & Poor’s.
Diamond Resorts Owner Trust 2014-1 will issue $181.2 million of A+’ notes and $18.7 million of A-’ notes. The notes benefit from 13% initial over collateralization and Credit Suisse is the lead manager on the deal.
The issuer’s previous transaction, Diamond Resorts Owner Trust 2013-2, achieved higher ratings. S&P rated the senior notes AA’ despite the fact that they benfitted from lower initial over collateralization of 10%.
The biggest difference between the deals is the average loan balance size. In its latest deal, Diamond increased the pool’s weighted average loan balance to $19,713 from $11,841 in its 2013-2 deal.
Loan terms remain in range with past Diamond deals, at a weighted average original term of 10 years and a weigheted average FICO credit score of 724. However the loans in the 2014-1 transaction are less seasoned with a weighted average seasoning of six months compared to 23 months in the 2013-2 deal.
Both deals include a prefunding period. In the latest transaction the issuer may use approximately $39.84 million of note proceeds that it deposited at closing into the prefunding account to acquire additional collateral.
Diamond has more than 515,000 members and more than 300 branded and affiliated resorts in continental US, Hawaii, Canada, Mexico, the Caribbean, Central and South America, Europe, Asia, Australia and Africa.