Ignite Restaurant Refinances Facility With KeyBank, BofA
Ignite Restaurant Group, Inc. announced that it has completed its internal assessment of its lease accounting policies and the review of its historical accounting for fixed assets and related depreciation and certain other accounting areas. Accordingly, the company has restated all of its previously issued financial statements.
In addition, the company announced a new $100 million credit facility to refinance existing debt at more favorable interest rates and reported unaudited financial results for its quarters ended June 18, 2012 and September 10, 2012. KeyBank and Bank of America served as joint lead arrangers and joint bookrunners for the new facility.
The new five-year $100 million revolving credit facility replaces $74.5 million of term loan debt and $25 million unused revolving credit facility scheduled to mature in March 2016.
The new facility bears interest between 1.25% and 2.25% over LIBOR, with no LIBOR floor. At closing the company’s borrowing rate decreased by approximately 390 basis points providing estimated annual interest expense savings of approximately $3.5 million to $3.7 million, assuming average outstanding debt balances under the new facility of approximately $50 million. The company repaid outstanding borrowings under the old facility in full with $29.5 million of cash on hand and proceeds from the new facility. At closing, $45 million was outstanding under the new facility.
With this facility in place, the company is well positioned to continue to execute its business strategies and grow its brands.
Jeffrey L. Rager, CFO for the Ignite Restaurant Group, added, “We are pleased to have secured this new debt facility at favorable rates, which we believe is a testament to the long-term potential of our business. Not only does it provide a significant savings opportunity, but we have strengthened our capital structure and maintained ample access to liquidity. With this facility in place, we are well positioned to continue to execute our business strategies and grow our brands.”
Ignite Restaurant Group, Inc. owns and operates two restaurant brands, Joe’s Crab Shack and Brick House Tavern + Tap.