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Morton's Restaurant ups term loan to $200 million, trims OID to 97½
By Sara Rosenberg
New York, Jan. 26 - Morton's Restaurant Group Inc. upsized its five-year term loan to $200 million from $190 million and tightened the original issue discount to 97½ from 97, according to a market source.
Pricing on the term loan, as well as on a $15 million 41/2-year revolver, remained at Libor plus 725 basis points with a 1.5% Libor floor.
Recommitments were due at 4 p.m. ET on Thursday.
Jefferies & Co. is the lead bank on the $215 million senior secured credit facility (B2/BB-), up from $205 million.
Amortization on the term loan is 2.5% in year one, 5% in years two and three and 10% in years four and five.
Financial covenants include a maximum consolidated total leverage ratio and a minimum fixed-charge coverage ratio.
Proceeds will be used, along with cash on hand, to fund the purchase of the company by Tilman J. Fertitta's wholly owned company Fertitta Morton's Restaurants Inc.
The term loan upsizing is resulting in an equal reduction in the rollover equity, the source added.
Under the buyout agreement, Morton's is being acquired for $6.90 per share in cash through a tender offer that expires on Jan. 31. Upon the successful completion of the tender offer, Fertitta will acquire all remaining shares through a second-step merger.
Closing is expected in early February, subject to the tender of a majority of shares, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.
Leverage through the credit facility will be in the low 3.0 times area.
Morton's is a Chicago-based operator of company-owned upscale steakhouses.
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