Wendy's Refinances Credit Facility - Analyst Blog
April 18 2013 - 11:10AM
Zacks
The Wendy's Company (WEN) recently announced
that its indirect wholly-owned subsidiary, Wendy's International,
Inc. has entered into an agreement to refinance its existing credit
facility of approximately $1,119 million. The deal is slated to
close on May 16, 2013.
The new credit refinances $350 million of the approximately $1,119
million senior secured Term Loan B into a new senior secured Term
Loan A. It is scheduled to expire in May 2018, one year earlier
than the Term Loan B.
The initiative will also extend the maturity period of the $200
million revolving credit facility by one year and reduce interest
on the remaining Term Loan B balance of approximately $769 million.
Hence, the twin effect of paying down the company’s high-cost debt
and extension of maturity period will strengthen the company’s
financial position.
Overall, this refinancing is expected to generate more than $19
million in ongoing annual interest expense savings along with $30
million of savings in ongoing annual net interest expense from its
2012 refinancing. The two refinancings will reduce annual net
interest expense by around $50 million compared to two years
ago.
The company remains committed to strengthening its balance sheet.
At the end of the fourth-quarter 2012, net debt multiple of Wendy’s
was 3.0 times based on trailing 12-month adjusted EBITDA, lower
than 3.2 times at the end of third-quarter 2012.
Wendy’s currently retains a Zacks Rank #3 (Hold). Some other
restaurant industry stocks with a favorable Zacks Rank include
Red Robin Gourmet Burgers Inc. (RRGB),
Burger King Worldwide Inc. (BKW) and
Cracker Barrel Old Country Store Inc. (CBRL).
While Red Robin and Cracker Barrel retain a Zacks Rank #1 (Strong
Buy), Burger King carries a Zacks Rank #2 (Buy).
BURGER KING WWD (BKW): Free Stock Analysis Report
CRACKER BARREL (CBRL): Free Stock Analysis Report
RED ROBIN GOURM (RRGB): Free Stock Analysis Report
WENDYS CO/THE (WEN): Free Stock Analysis Report
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