Daily News: June 27, 2014

GE Capital Adds Tranche C Development Loan to SIR Facilities

SIR announced it entered into a third amended and restated loan agreement with its existing senior lender, GE Capital, to add a new $6 million tranche C development loan to the existing loan facilities, with which it will be coterminous (November 14, 2016). Under the terms of the loan agreement, Tranche C is intended to be drawn by September 19, 2014, with the date open to extension until March 19, 2015, at the sole discretion of GE Capital. A copy of the loan agreement will be filed on SEDAR.

The tranche C development loan is available to enable SIR to finance: costs incurred in connection with the acquisition of furniture, fixtures, equipment and leasehold improvements relating to new locations, and renovations and capital expenditures relating to existing locations.

Peter Fowler, president and CEO of SIR, stated, “This additional senior debt with GE Capital further enhances our flexibility to finance prudent growth through the development of new corporately owned restaurants, as well as renovation programs for our existing restaurants. We expect that new restaurant growth and renovations of existing restaurants, as market conditions permit, will benefit both SIR Corp. and the unitholders of the Fund.”

The financial covenants applicable to SIR have been modified to include a minimum cash available for debt service ratio, commencing the first quarterly reporting date subsequent to the initial advance of the tranche C development loan. The maximum senior leverage ratio from and after the fiscal quarter ended August 31, 2014, is reduced to 3.25:1.0 (from 3.5:1.0 in previous reporting periods). The minimum fixed charge coverage ratio remains the same. The loan is secured by substantially all of the assets of SIR and most of its subsidiaries, which are also guarantors. The SIR Royalty Limited Partnership and the Fund have not guaranteed the loan, but have agreed to continue to subordinate and postpone their claims against SIR to the claims of GE Capital.

SIR is a privately held Canadian corporation that owns and operates a portfolio of 58 restaurants in Canada.