BBX CAPITAL CORPORATION (NYSE:BBX) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a RegistrantItem 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On June 6, 2017, Bluegreen Corporation (“Bluegreen”), a wholly owned subsidiary of BBX Capital Corporation, completed a private offering and sale of approximately $120.2 million of investment-grade, timeshare receivable-backed notes (the “2017-A Term Securitization”). The 2017-A Term Securitization consisted of the issuance of two tranches of timeshare receivable-backed notes (the “Notes”): approximately $88.8 million of Class A and approximately $31.4 million of Class B notes with note interest rates of 2.95% and 3.59%, respectively, which blended to an overall weighted average note interest rate of approximately 3.12%. The gross advance rate for this transaction was 88%. The Notes mature in October 2032. 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 timeshare receivables sold or to be sold to BXG Receivables Note Trust 2017-A (the “Trust”) is approximately $136.5 million, approximately $117.0 million of which was sold to the Trust at closing and approximately $19.5 million of which (the “Prefunded Receivables”) is expected to be sold to the Trust by October 4, 2017. The gross proceeds of such sales to the Trust are anticipated to be approximately $120.2 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 $32.3 million, representing all amounts outstanding (including accrued interest) under Bluegreen’s existing purchase facility with KeyBank and DZ Bank (the “KeyBank/DZ Purchase Facility”); repay Liberty Bank approximately $26.8 million (including accrued interest) under Bluegreen’s existing facility with Liberty Bank (the “Liberty Bank Facility”); capitalize a reserve fund; and pay fees and expenses associated with the transaction. In April 2017, Bluegreen, as servicer, redeemed the notes related to BXG Receivables Note Trust 2010-A for approximately $10.0 million, and certain of the timeshare loans in such trust were sold to the Trust in connection with the 2017-A Term Securitization. The remainder of the gross proceeds from the 2017-A Term Securitization were used for costs of the 2017-A Term Securitization and are otherwise expected to be used by Bluegreen for general corporate purposes. As a result of the facility repayments described above, immediately after the closing of the 2017-A Term Securitization, (i) there were 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, 2019 and (ii) there was approximately $10 million outstanding under the Liberty Bank Facility, which permits maximum outstanding receivable-backed borrowings of $50.0 million on a revolving basis through November 30, 2017, in each case, subject to eligible collateral and the other terms and conditions of the facility. Thus, additional availability of approximately $58.9 million in the aggregate was created under the KeyBank/DZ Purchase Facility and Liberty Bank Facility as a result of the repayments.
Subject to performance of the collateral, Bluegreen will receive any excess cash flows generated by the receivables transferred under the 2017-A Term Securitization (excess meaning after payments of customary fees, interest, and principal under the 2017-A Term Securitization) on a pro-rata basis as borrowers make payments on their timeshare loans.
While ownership of the timeshare receivables included in the 2017-A Term Securitization is transferred and sold for legal purposes, the transfer of these timeshare 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 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 to an exemption from the registration requirements of the Securities Act and applicable state securities laws.
The description of the 2017-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.
Item 9.01 Financial Statements and Exhibits.
Exhibit 10.1 – Indenture, dated as of June 6, 2017, between BXG Receivables Note Trust 2017-A, as Issuer, Bluegreen 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
Exhibit 10.2 – Sale Agreement, dated as of June 6, 2017, by and among BRFC 2017-A LLC, as Depositor, and BXG Receivables Note Trust 2017-A, as Issuer
Exhibit 10.3 – Transfer Agreement, dated as of June 6, 2017, by and among Bluegreen Corporation, BXG Timeshare Trust I, as Seller, and BRFC 2017-A LLC, as Depositor
Exhibit 10.4 – Purchase and Contribution Agreement, dated as of June 6, 2017, by and among Bluegreen Corporation, as Seller, and BRFC 2017-A LLC, as Depositor
Exhibit 10.5 – BXG Receivables Note Trust 2017-A, Standard Definitions
About BBX CAPITAL CORPORATION (NYSE:BBX)
BBX Capital Corporation (BBX Capital) is involved in the acquisition, ownership and management of joint ventures and investments in real estate and real estate development projects, as well as investments in operating businesses. The Company operates through three business segments: BBX, Renin and Sweet Holdings. The BBX segment consists of the activities associated with managing the commercial loan portfolio, real estate properties of BBX Capital and its subsidiaries, including BBX Partners, BBX Capital Asset Management, LLC (CAM) and Florida Asset Resolution Group, LLC (FAR). The Renin segment consists of the activities of Renin Holdings, LLC and its subsidiaries (Renin). Renin manufactures interior closet doors, wall decor, hardware and fabricated glass products. The Sweet Holdings segment consists of the activities of BBX Capital’s acquired operating businesses in the confection industry. The Sweet Holdings segment companies manufacture chocolate and hard candy products.