Boston, MA 10/01/2014 (wallstreetpr) – Operator of two restaurant concepts, DineEquity Inc (NYSE:DIN) disclosed that its subsidiaries have sold Series 2014-1 and Class A-2 Fixed Rate secured senior notes. The company indicated that it issued these notes through a privately placed securitization transaction. It would use the amount to refinance its senior notes due in October.
Prices Notes
The company said that the senior notes would carry an interest rate of 4.277% a year. The interest rate would be payable every quarter with a projected term of seven years, its press statement revealed. It indicated that the interest would be paid from the cash flows generated from the assets of its Applebee’s, as well as, IHOP domestic franchising apart from rental and financing assets. The principal would also be paid out of these amounts.
DineEquity Inc (NYSE:DIN) said that the co-issuers have struck a purchase deal for issue of a maximum of $100 million Series 2014-1 notes, which was a variable one, and Class A-1 that enables the co-issuers to access amounts on a revolving basis from time to time apart from issue of letters of credit.
Use Of Proceeds
The company said that it would use the proceeds from the Notes sale through private offering to refinance its 9.5% senior notes of about $761 million outstanding principal amount. The company expects to pay the note holders on or before October in the current year. It also made its intention of repaying the entire outstanding balance amount of about $464 million of its senior secured credit facility.
DineEquity Inc (NYSE:DIN) said that the remaining proceeds from the private issue would be principally used for transaction expenses related to the refinancing and for general corporate purposes, which included working capital.
The DineEquity Inc (NYSE:DIN)’s Chairman and CEO, Julia Stewart, said that the new debt arrangement offers higher financial flexibility besides leveraging to its capacity in consistence with its stable and strong free cash flow. The company also believes that market conditions and timing were important to take the refinancing steps.
