Bob Evans Farms announced that it amended its existing credit facility with a bank group led by PNC and PNC Capital Markets that acted as administrative agent and joint lead arranger and sole bookrunner, respectively for the facility.

The credit agreement has been amended to:

• Increase the level of permitted indebtedness in connection with sale and leaseback transactions of assets from $100 million to $300 million;
• Remove the $150 million share repurchase cap during the 2016 fiscal year, however, share repurchases remain subject to a leverage ratio restriction; and
• Decrease the size of the facility from $750 million to $650 million, which will result in lowering the company’s unused facility fee costs.
• The credit facility’s $300 million accordion feature remains in place.

J.P. Morgan Securities, Merrill Lynch and Wells Fargo acted as joint lead arrangers. Co-syndicated agents included Bank of America, JPMorgan Chase and Wells Fargo. The other lenders are KeyBank, Bank of America, Fifth Third, U.S. Bank, Huntington National and Ohio Valley Bank.

Chief administrative officer and CFO Mark Hood said, “We are pleased to have completed this amendment to our credit facility as it enables Bob Evans Farms to effectively and efficiently lengthen the tenor of its capital structure by introducing long-term leases for a portion of our asset base. This completes an important step as we move forward with plans to monetize approximately $200 million of restaurant properties through a sale-leaseback transaction(s).

Along with monetization of two of the company’s industrial properties and its headquarters, the amended facility provides Bob Evans with the flexibility to continue returning capital to shareholders while managing leverage prudently as we continue our restructuring and turnaround activities and positioning the Company for sustainable profitable growth.”