Bank of America served as administrative agent on a $270 million term loan credit agreement with Darden Restaurants. Additionally, BofA Securities, and U.S. Bank served as joint lead arrangers and joint bookrunners, U.S. Bank served as syndication agent and Truist Bank served as documentation agent for the facility.
The term loan was fully drawn on April 6, 2020 and matures on April 5, 2021. The term loan carries a current interest rate of LIBOR plus 300 basis points. The agreement also includes a provision allowing Darden Restaurants to request an increase of up to $100 million in borrowings at the election of existing or new lenders.
Based on performance through April 5, Darden Restaurants has not used any of the cash proceeds from the previously drawn $750 million revolving credit agreement. With the additional funds from the term loan, the company now has more than $1 billion in investible cash on hand. At recent weekly sales levels, since transitioning operations to a to go-only format, the company expects ongoing weekly cash burn rate to be approximately $25 million including capital expenditures and not including any additional changes to net working capital.
“The challenges of this unprecedented situation are far from over,” Gene Lee, CEO of Darden Restaurants, said in a written statement. “However, I remain confident that the strength of our portfolio, the power of our competitive advantages and the resiliency of our people will enable us to successfully navigate our way through it.”
Darden is a restaurant company featuring a portfolio of brands that include Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze and Eddie V’s.
