Bear Stearns set terms on the $185 million credit facility for New World Restaurant Group at a bank meeting last Thursday. The loan consists of a five-year, $15 million revolver; a six-year, $125 million "B" term loan; and a seven-year, $45 million second-lien loan. The new loan will primarily refinance a $160 million issue of 13% senior secured notes expiring in 2008. It could not be determined if pricing had been set by press time. Richard Dutkiewicz, cfo, did not return calls. Bankers at Bear Stearns declined to comment.
Moody's Investors Service assigned a B3 rating to the first-lien and a Caa1 to the second-lien. Free cash flow is expected to remain tight for several years because the company is at the start of an operational turnaround. Progress has been made to stabilize operations and improve efficiency through non-breakfast sales.
The company opens eateries under the brands Chesapeake Bagel Bakery, Einstein Bros., Manhattan Bagel and Noah's New York Bagels. As of December 28, 2004, there were 453 company-operated locations, as well as 180 franchised and 57 licensed locations. Greenlight Capital owns 97% of the company's common stock.