Terms of the new loan include interest payable at LIBOR, with a floor of 100 basis points, plus 600 basis points and a seven-year maturity. The loan will amortize in equal quarterly installments in aggregate annual amounts equal to 1% of the original principal amount, with the balance payable on the final maturity date. The loan is prepayable after two years at par and is secured by a pledge of all the equity interests of substantially all of TravelCenters of America’s wholly-owned subsidiaries and a pledge of substantially all of TravelCenters of America’s other assets and the assets of such wholly-owned subsidiaries.
TravelCenters of America expects to use the net proceeds from the term loan for general business purposes, including funding of deferred capital expenditures, updates to key IT infrastructure and growth initiatives consistent with its transformation plan.
“As we look ahead to 2021, we have the people, the plan, the processes and now the liquidity to advance our transformation playbook to help this great company begin to achieve its potential. This term loan provides for these opportunities, which we will carry out with caution and care while we continue to manage through an uncertain pace of recovery from the pandemic that lies ahead,” Jonathan M. Pertchik, CEO of TravelCenters of America, said. “By closing this new loan, we have further strengthened our balance sheet and given ourselves increased flexibility in a dynamic capital environment. TA is well-positioned to address remedial site-level maintenance and much-needed IT upgrades, as well as fund our growth initiatives.”
TravelCenters of America is a travel center network.