Denny’s inks $250M credit facility

By

Denny’s Corp. has entered into a new five-year, $250 million credit facility that refinances its senior secured debt and is expected to result in annualized interest expense savings of about $5 million, the company said Thursday.

The new senior secured bank credit facility includes a $190 million term loan and a $60 million revolving line of credit. The facility refinances Denny’s senior secured debt from September 2010, which was amended in March 2011. The former facility held a $250 million term loan and a $60 million revolver.

“Our new credit facility is a testament to the tremendous progress Denny’s has made over the past several years with its franchise-focused business model, resulting in a stronger balance sheet with growing profitability and free cash flow,” John Miller, Denny’s president and chief executive, said in a statement. “In addition to reducing interest costs, this refinancing allows the company to further strengthen its balance sheet with more flexibility to create additional value for stockholders.”

The refinanced facility has a reduced interest rate of LIBOR, or London Interbank Offered Rate, plus 300 basis points, or 3 percent, for the term loan and revolver. The prior facility held an interest rate of LIBOR plus 375 basis points, or 3.75 percent.

The Spartanburg, S.C.-based company, which operates or franchises 1,685 family-dining restaurants, said the closing of the new facility will lead to an $8 million one-time charge in the second quarter.

Wells Fargo Securities LLC, Regions Capital Markets and GE Capital Markets Inc. are the joint lead arrangers and joint bookrunners in the new facility.

RELATEDVideo: Denny's CEO John Miller on tapping new markets

Contact Sarah Lockyer at sarah.lockyer@penton.com.
Follow her on Twitter: @slockyerNRN