Diversified Restaurant Holdings Closes $16MM With RBS Citizens
Diversified Restaurant Holdings, Inc. (DRH), the owner, operator and franchisor of the unique, full-service, ultra-casual restaurant and bar Bagger Dave’s Legendary Burgers Tavern and a franchisee for Buffalo Wild Wings (BWW), announced on April 6, 2012 that it entered into a new, seven-year senior secured term loan with RBS Citizens.
Through a fixed-rate swap arrangement, the term loan bears interest at a rate ranging from 3.91% to 4.81%, depending on the company’s lease adjusted leverage ratio. Principal and interest payments are amortized over seven years, with monthly principal payments of $190,476 plus accrued interest.
The loan will be used to repay approximately $15.7 million, or substantially all, of its current outstanding senior debt as well as the break-up cost for interest rate swap agreements that were used to fix a portion of the rates associated with its previous loan agreements. The remaining $0.3 million will be used for working capital and to support the company’s growth strategy.
David Burke, CFO of DRH commented, “This seven-year facility measurably reduces our borrowing costs and consolidates our borrowings at attractive terms and conditions while fitting well within our long-term capital strategy. The measurable reduction in interest expense also greatly improves our liquidity and earnings power. This new loan, together with our strong balance sheet, provides us the financial flexibility to continue to pursue our strategic growth objectives.”