Denny's Corp. has increased the size and decreased the spread on its proposed credit facility, while at the same time reducing a proposed bond offering. The "B" loan was increased by $25 million to $225 million and the second-lien term loan has been increased to $120 million from $100 million, a banker said. In addition, the spread on the "B" loan flexed down 25 basis points to LIBOR plus 3 1/4%, while the spread on the second-lien term loan was decreased by 37.5 bps to LIBOR plus 5 1/8%, the banker added.
The credit, led by Bank of America and UBS, also includes a $75 million revolver and is being used to refinance the company's existing facility and prepay and refinance some outstanding notes (LMW, 8/23). The financing is intended to strengthen the company's capital structure and reduce the interest expense. The previous credit comprised a $115 million revolver at LIBOR plus 5% and $40 million term loan at an 11% fixed rate.
While the term loans were increased, the proposed bonds are being reduced, the banker noted. The company was considering up to $320 million of additional financing to refinance the notes. A lender said the bond offering will likely be $175 million, co-led by B of A and UBS.
J.P. Morgan led the previous deal. Other lenders on the previous loan include Wells Fargo Foothill, CIT Group, Farallon Dining Investors, Fortress Credit Opportunities and Transamerica Business Capital Corp. Officials from B of A and UBS either declined comment or did not return calls. A Denny's spokeswoman was unavailable for comment.