Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On October 8, 2020, Bluegreen Vacations Corporation (the "Company") completed a
private offering and sale of approximately $131.0 million of vacation ownership
interest ("VOI") receivable-backed notes (the "2020-A Term Securitization"). The
2020-A Term Securitization consisted of the issuance of three tranches of VOI
receivable-backed notes (collectively, the "Notes") as follows: approximately
$48.6 million of Class A Notes, approximately $47.9 million of Class B Notes,
and approximately $34.5 million of Class C Notes. The interest rates on the
Class A Notes, Class B Notes and Class C Notes are 1.55%, 2.49% and 4.22%,
respectively, which blends to an overall weighted average note interest rate of
approximately 2.60%. The gross advance rate for this transaction was 88.0%. The
Notes mature in February 2036. KeyBanc Capital Markets Inc. ("KeyCM") and
Barclays Capital Inc. acted as joint bookrunners and co-lead managers and were
the initial purchasers of the Notes. KeyCM also acted as structuring agent for
the transaction.
The amount of the VOI receivables sold or to be sold to BXG Receivables Note
Trust 2020-A (the "Trust") in the transaction is approximately $148.9 million,
approximately $138.9 million of which was sold to the Trust at closing and
approximately $10.0 million of which (the "Prefunded Receivables") is expected
to be sold to the Trust by February 5, 2021. The gross proceeds of such sales to
the Trust are anticipated to be approximately $131.0 million. A portion of the
proceeds received to date were used to: repay KeyBank National Association
("KeyBank") and DZ Bank AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am
Main ("DZ Bank") approximately $61.1 million, representing all amounts
outstanding (including accrued interest) under the Company's existing
purchase facility with KeyBank and DZ Bank (the "KeyBank/DZ Purchase Facility");
repay Liberty Bank approximately $6.4 million under the Company's existing
facility with Liberty Bank (the "Liberty Bank Facility"); repay Pacific Western
Bank approximately $14.6 million under the Company's existing facility with
Pacific Western Bank (the "Pacific Western Bank Facility"); capitalize a reserve
fund; and pay fees and expenses associated with the transaction. Prior to the
closing of the 2020-A Term Securitization, the Company, as servicer, funded
approximately $5.0 million in connection with the servicer redemption of the
notes related to the BXG Receivables Note Trust 2012-A, and certain of the VOI
notes in such trust were sold to the Trust in connection with the 2020-A Term
Securitization. The remainder of the gross proceeds from the 2020-A Term
Securitization are expected to be used by the Company for general corporate
purposes. As a result of the facility repayments described above, (i) there
currently are no amounts outstanding under the KeyBank/DZ Purchase Facility,
which allows for maximum outstanding receivable-backed borrowings of $80.0
million on a revolving basis through December 31, 2022, (ii) there is currently
approximately $13.3 million outstanding under the Liberty Bank Facility, which
permits maximum outstanding receivable-backed borrowings of $40.0 million on a
revolving basis through June 30, 2021, and (iii) there is currently
approximately $9.7 million outstanding under the Pacific Western Bank Facility,
which permits maximum outstanding receivable-backed borrowings of $40.0 million
on a revolving basis through September 20, 2021. Thus, additional availability
of approximately $82.1 million in the aggregate was created under the KeyBank/DZ
Purchase Facility, Liberty Bank Facility and Pacific Western Facility as a
result of the repayments. With respect to each of the KeyBank/DZ Purchase
Facility, the Liberty Bank Facility and the Pacific Western Bank Facility, the
maximum outstanding receivable-backed borrowings permitted as set forth above is
subject to eligible collateral and the other terms and conditions of the
facility.
Subject to performance of the collateral, the Company will receive any excess
cash flows generated by the receivables transferred under the 2020-A Term
Securitization (excess meaning after payments of customary fees, interest, and
principal under the 2020-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 2020-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 2020-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.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Exhibit
10.1 Indenture, dated as of October 8, 2020, among BXG Receivables Note Trust
2020-A, as Issuer, Bluegreen Vacations Corporation, as Servicer,
Vacation Trust, Inc., as Club Trustee, Concord Servicing Corporation, as
Backup Servicer, and U.S. Bank National Association, as Indenture
Trustee, Paying Agent and Custodian.
10.2 Sale Agreement, dated as of October 8, 2020, by and between BRFC 2020-A
LLC, as Depositor, and BXG Receivables Note Trust 2020-A, as Issuer.
10.3 Transfer Agreement, dated as of October 8, 2020, by and among Bluegreen
Vacations Corporation, BXG Timeshare Trust I, as Seller, and BRFC 2020-A
LLC, as Depositor.
10.4 Purchase and Contribution Agreement, dated as of October 8, 2020, by and
between Bluegreen Vacations Corporation, as Seller, and BRFC 2020-A LLC,
as Depositor.
10.5 BXG Receivables Note Trust 2020-A, Standard Definitions.
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