DUBLIN, Ohio ? The Wendy?s Company (NASDAQ: WEN) today announced that its indirect wholly owned subsidiary, Wendy?s International, Inc., has entered into an agreement to refinance its existing credit facility. Subject to certain closing conditions, the Company expects the transaction to close on May 16, 2013.
The Company expects this refinancing to generate more than $19 million in ongoing annual interest expense savings, in addition to the approximately $30 million in ongoing annual net interest expense savings from the Company?s 2012 refinancing. Based on current market conditions, the refinancing represents a year-over-year reduction in interest expense of approximately 175 basis points.
Details of the refinancing are as follows:
? Refinancing of $350 million of the approximately $1,119 million senior secured Term Loan B into a new senior secured Term Loan A, which will have an interest rate margin of 2.25 percent for Eurodollar rate loans (and no floor) and will mature in May 2018, one year earlier than the Term Loan B.
? Extension of the maturity of the $200 million revolving credit facility by one year (from May 2017 to May 2018).
? Repricing of the remaining Term Loan B balance of approximately $769 million by reducing the interest rate margin from 3.5 percent to 2.5 percent for Eurodollar rate loans and by reducing the floor from 1.25 percent to 0.75 percent for Eurodollar rate loans.
The refinancing does not contain any material changes to existing covenants or other terms of the credit facility, beyond those described above. The Company anticipates certain fees and noncash expenses associated with the transaction, but does not expect to incur any prepayment premiums as a result of the refinancing. The Company expects to maintain its current leverage ratios as a result of the refinancing.
[quote]”This transaction is an important part of our financial management component of our ‘Recipe to Win,'” said Chief Financial Officer Steve Hare. “Coupled with our 2012 refinancing, we will reduce our annual net interest expense by approximately $50 million compared to two years ago. This will benefit our cash flow and earnings per share in the coming years, and provides us with additional flexibility with respect to organic growth opportunities and shareholder-enhancing initiatives.”[/quote]
Bank of America Merrill Lynch and Wells Fargo are acting as joint lead arrangers in the transaction.
First-Quarter Earnings Release and Conference Call Scheduled for May 8
The Company will release its first-quarter earnings results before the market opens on May 8 and host a conference call at 10 a.m. ET the same day, with a simultaneous webcast from the investor relations section of the Company’s website at?www.aboutwendys.com. Hosting the call will be President and Chief Executive Officer Emil Brolick, Chief Financial Officer Steve Hare and Chief Communications Officer John Barker. The live conference call will be available at (877) 572-6014 or, for international callers, at (281) 913-8524.