Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On June 20, 2023, Bluegreen Vacations Corporation (“Bluegreen”), a wholly owned subsidiary of Bluegreen Vacations Holding Corporation, completed a private offering and sale of approximately $214.6 million of vacation ownership interest (“VOI”) receivable-backed notes (the “2023-A Term Securitization”). The transaction consisted of the issuance of three tranches of notes (collectively, the “Notes”) with a weighted average coupon rate of approximately 6.32% and a maturity date in November 2038. The gross advance rate for the transaction was 85.5%. KeyBanc Capital Markets Inc. (“KeyCM”) and BofA Securities, Inc. (“BofA”) acted as joint bookrunners and co-lead managers, and Truist Securities, Inc. (“Truist”), Citizens Capital Markets Inc. (“Citizens”) and Barclays Capital Inc. (“Barclays”) acted as co-managers. KeyCM also acted as structuring agent for the transaction. KeyCM, BofA, Truist, Citizens and Barclays were the initial purchasers of the Notes.
The amount of the VOI receivables sold or to be sold to BXG Receivables Note Trust 2023-A (the “Trust”) in the transaction is approximately $251.0 million, approximately $247.2 million of which was sold to the Trust at closing and approximately $3.8 million of which is expected to be sold to the Trust by October 18, 2023. The gross proceeds of such sales to the Trust are anticipated to be approximately $212.2 million. A portion of the proceeds received at the closing were used to: repay approximately $181.6 million under Bluegreen’s existing VOI receivable-backed notes purchase facility with KeyBank National Association , Bank of America, N.A, Truist Bank, Citizens Bank, N.A. and DZ Bank AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main (the "Purchase Facility"), representing all amounts outstanding under the Purchase Facility; capitalize a reserve fund; and pay fees and expenses associated with the transaction. The remainder of the gross proceeds from the 2023-A Term Securitization are expected to be used for general corporate purposes. The Purchase Facility allows for maximum outstanding receivable-backed borrowings of $250.0 million on a revolving basis through September 30, 2025, subject to eligible collateral and the other terms and conditions of the facility. Thus, additional availability of approximately $181.6 million in the aggregate is expected as a result of the repayment described above.
Subject to performance of the collateral, Bluegreen will receive any excess cash flows generated by the receivables transferred under the 2023-A Term Securitization (excess meaning after payments of customary fees, interest and principal under the 2023-A Term Securitization) on a pro-rata basis as borrowers make payments on their VOI loans.
While ownership of the VOI receivables included in the 2023-A Term Securitization is transferred and sold for legal purposes, the transfer of these receivables is accounted for as a secured borrowing for financial accounting purposes. Accordingly, no gain or loss was recognized as a result of this transaction.
The Notes were offered and sold to the initial purchasers in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and were subsequently offered and sold by the initial purchasers only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and, outside the United States, only to non-US investors pursuant to Regulation S. The Notes have not been registered under the Securities Act or any state securities laws and, unless so registered (which is not expected), the Notes may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.
The description of the 2023-A Term Securitization set forth above is a summary only, does not purport to be complete and is qualified in its entirety by reference to the full text of the agreements and instruments governing the transaction, which are included as Exhibits 10.1 through 10.5 of this Current Report on Form 8-K and are incorporated herein by reference.