CKE Expands Credit, Retires Bonds
CKE Restaurants is significantly expanding its credit facility to replace its notes with lower-cost debt.
CKE currently has a $150 million revolver and $25 million term loan. Abajian declined to comment on pricing, but price talk was LIBOR plus 33/4% on the facility (LMW, 9/29). The new facility comprises a three-year, $150 million revolver; five-year, $170 million first-lien term loan; and six-year, $60 million second-lien term loan. The revolver and first-lien term loan are being talked at LIBOR plus 23/4% while price talk on the second-lien term loan is LIBOR plus 43/4%. "This does provide fairly substantial interest expense savings for the company, estimated at $6.5 million during the first year," Abajian said.
Syndication launched April 8. "It's moving along very well," Abajian noted. The loan was almost filled two business days after launch, market participants noted. CKE is the parent company of fast-food chains Hardee's and Carl's Jr. BNP Paribas bankers declined comment.