Chuy’s Announces New $25 Million Revolver With Wells Fargo
Chuy’s Holdings entered into a new five-year $25 million revolving credit facility with Wells Fargo Bank. The new facility replaces an existing senior secured credit facility that was scheduled to mature in May 2016.
At closing, $5 million was drawn under the new revolving credit facility to pay off the balance of the old facility plus accrued interest and fees.
Steve Hislop, president and CEO of Chuy’s Holdings stated, “We are pleased to have closed this financing, which will provide us with a more favorable interest rate, an extended maturity, increased flexibility and simplified covenants as compared to our former senior secured credit facility. With this new facility in place, we believe we are well positioned to continue to execute our business strategies and facilitate our growth plans well into the future.”
Excluding the existing balance, the new facility allows for available borrowings of $20 million compared to availability of approximately $10.5 million under the old facility. Additionally, the new facility bears interest between 1.75% and 2.25% over LIBOR, dependent upon the company’s leverage ratio, with no LIBOR floor.
As of closing, the company’s borrowing rate was reduced by approximately 5% compared to the current rates under the previous facility and is expected to reduce annual interest expense by approximately $250,000 at current borrowing levels. In conjunction with the refinancing, the Company will record a one-time pre-tax expense of approximately $91,000 related to the write-off of financing costs previously deferred for the old facility.
Austin, TX-based Chuy’s Holdings owns and operates 39 full-service restaurants across 8 states serving Tex Mex inspired dishes.