Wells Fargo, Others Provide $225 Million to Red Robin
Red Robin International, Inc. (RRI), a wholly owned subsidiary of Red Robin Gourmet Burgers, Inc., announced that it has closed on a new $225 million credit agreement. The new credit facility, a five-year $225 million revolving line of credit, replaces a facility comprised of a $150 million term loan and $100 million revolving line of credit that was scheduled to mature in June 2016.
The transaction was arranged by Wells Fargo Bank as administrative agent, Bank of America as syndication agent, BBVA Compass and U.S. Bank as documentation agents, Rabobank International as senior managing agent, and Wells Fargo Securities and Merrill Lynch, Pierce, Fenner & Smith as co-lead arrangers and co-bookrunners.
The refinancing resulted in a 50 basis point reduction in the spread over LIBOR based on leverage as of the end of the third fiscal quarter 2012. The amended credit agreement allows RRI to increase the credit facility by up to an additional $100 million in the future, subject to lender participation. As of the end of the company’s fiscal third quarter on September 30, 2012, the balance outstanding under the prior credit facility was $121.9 million.
“We’re very pleased with the execution of our new credit agreement, which reflects the further strengthening of Red Robin’s financial position and improvements in the credit markets,” said Stuart Brown, Red Robin Gourmet Burgers’ chief financial officer. “This new facility provides Red Robin with additional financial flexibility to deliver on our strategic plan while extending our debt maturities.”
In conjunction with the closing of the credit agreement, the company anticipates that it will record a non-cash, pre-tax charge of approximately $2.9 million, comprised of a write-off of unamortized fees from the prior credit agreement and a charge related to the re-designation of an interest rate swap in the fourth fiscal quarter 2012.
Red Robin International, Inc., a wholly owned subsidiary of Red Robin Gourmet Burgers, Inc., is a casual dining restaurant chain.