DineEquity, Inc. Completes $1.4 Billion Securitization Refinancing
01 October 2014 - 12:00AM
Business Wire
DineEquity, Inc. (NYSE: DIN), the parent company of Applebee's
Neighborhood Grill & Bar® and IHOP® restaurants, today
announced that the Company’s indirect, special purpose subsidiaries
(the “Co-Issuers”) have issued and sold $1.3 billion of their
Series 2014-1, Class A-2 Fixed Rate Senior Secured Notes (the
“Notes”). The Notes will bear interest at a rate of 4.277% per
annum, payable quarterly, and will have an expected term of seven
years. The Notes were issued in a privately placed securitization
transaction. The Co-Issuers and their subsidiaries will own
substantially all of the Applebee’s and IHOP domestic franchising,
rental and financing assets and will use cash flows generated from
these assets to make interest and principal payments on the
Notes.
“We are very pleased to have successfully completed the
securitization at an attractive fixed interest rate. The new debt
structure provides for increased financial flexibility and
leverages our ability to consistently generate strong, stable free
cash flow,” said Julia A. Stewart, Chairman and Chief Executive
Officer of DineEquity, Inc.
Tom Emrey, Chief Financial Officer of DineEquity, Inc., said,
“We believe the favorable market conditions and timing were optimal
to take this significant step and better position the Company for
long-term success.”
The Co-Issuers also entered into a purchase agreement for the
issuance of up to $100 million Series 2014-1 Variable Funding
Senior Notes, Class A-1 (the “VFN”), which will allow the
Co-Issuers to borrow amounts from time to time on a revolving basis
and issue letters of credit.
The Company expects to use the proceeds from the sale of the
Notes to refinance approximately $761 million in outstanding
principal amount of its 9.5% senior notes on or about October 30,
2014 and the entire outstanding balance of approximately $464
million of its senior secured credit facility, which was repaid at
the closing. The remaining proceeds will be primarily used for
transaction costs associated with the refinancing and general
corporate purposes.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy the Notes or any other security.
The Notes have not been, and will not be, registered under the
Securities Act of 1933, as amended (the “Securities Act”), or any
state securities laws, and may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements of the Securities Act and applicable
state securities laws.
About DineEquity, Inc.
Based in Glendale, California, DineEquity, Inc., through its
subsidiaries, franchises and operates restaurants under the
Applebee’s Neighborhood Grill & Bar and IHOP brands. With more
than 3,600 restaurants combined in 19 countries, over 400
franchisees and approximately 200,000 team members (including
franchisee- and company-operated restaurant employees), DineEquity
is one of the largest full-service restaurant companies in the
world. For more information on DineEquity, visit the Company's Web
site located at www.dineequity.com.
Forward-Looking Statements
Statements contained in this press release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. You can identify these
forward-looking statements by words such as "may," "will,"
"should," "expect," "anticipate," "believe," "estimate," "intend,"
"plan" and other similar expressions. These statements involve
known and unknown risks, uncertainties and other factors, which may
cause actual results to be materially different from those
expressed or implied in such statements. These factors include, but
are not limited to: the effect of general economic conditions; the
Company's indebtedness and risks associated with the timing and our
ability to refinance the Company’s indebtedness; risk of future
impairment charges; trading volatility and the price of the
Company’s common stock; the Company's results in any given period
differing from guidance provided to the public; the highly
competitive nature of the restaurant business; the Company's
business strategy failing to achieve anticipated results; risks
associated with the restaurant industry; risks associated with
locations of current and future restaurants; rising costs for food
commodities and utilities; shortages or interruptions in the supply
or delivery of food; ineffective marketing and guest relationship
initiatives and use of social media; changing health or dietary
preferences; our engagement in business in foreign markets; harm to
our brands' reputation; litigation; fourth-party claims with
respect to intellectual property assets; environmental liability;
liability relating to employees; failure to comply with applicable
laws and regulations; failure to effectively implement restaurant
development plans; our dependence upon our franchisees;
concentration of Applebee's franchised restaurants in a limited
number of franchisees; credit risk from IHOP franchisees operating
under our previous business model; termination or non-renewal of
franchise agreements; franchisees breaching their franchise
agreements; insolvency proceedings involving franchisees; changes
in the number and quality of franchisees; inability of franchisees
to fund capital expenditures; heavy dependence on information
technology; the occurrence of cyber incidents or a deficiency in
our cybersecurity; failure to execute on a business continuity
plan; inability to attract and retain talented employees; risks
associated with retail brand initiatives; failure of our internal
controls; and other factors discussed from time to time in the
Company's Annual and Quarterly Reports on Forms 10-K and 10-Q and
in the Company's other filings with the Securities and Exchange
Commission. The forward-looking statements contained in this
release are made as of the date hereof and the Company assumes no
obligation to update or supplement any forward-looking
statements.
Investor ContactDineEquity,
Inc.Ken DipteeExecutive Director, Investor
Relations818-637-3632orMedia
ContactSard Verbinnen & Co.Dan Goldstein and Paul
Kranhold310-201-2040 and 415-618-8750