By Lisa Kerner
Charlotte, N.C., March 16 - Domino's Pizza, Inc. announced it completed its recapitalization plan first announced at the end of February, which included the private placement of a $1.68 billion securitized debt facility.
As previously reported, the new facility will replace some of its subsidiaries' remaining $1.45 billion balance from an April 2007 securitized financing facility.
Remaining proceeds and cash on hand will be used to pay a $3 per share special cash dividend to company shareholders and to make some dividend equivalent payments to holders of outstanding stock options. Together, the payments will total about $188 million.
Funding details
Domino's Pizza Master Issuer LLC and other subsidiaries placed $1.58 billion of 5.216% series 2012-1 fixed-rate senior secured notes, class A-2, and $100 million of series 2012-1 variable funding senior notes, class A-1, through a new asset-backed securitization (Baa1/BBB+).
The fixed-rate notes have an anticipated maturity of seven years and a legal maturity of 30 years, according to a company news release.
The fixed-rate notes' scheduled principal payments are as follows:
• $23.6 million per year in years one through three;
• $31.5 million in year four; and
• $39.4 million per year in years five through seven.
The company may elect not to make scheduled principal payments if its leverage ratio is 4.5 times or less. But if it elects to do so and the ratio subsequently rises above 4.5 times, it must make up the payments it elected to skip.
Barclays Capital Inc. was the structuring adviser and joint bookrunner. J.P. Morgan Securities LLC was the joint bookrunner for the securitization.
"The fact that we will be paying less in interest, along with the stability of a fixed interest rate over the next seven years, and the flexibility of an available revolver, gives us the ability to invest in the business and reward shareholders," president and chief executive officer J. Patrick Doyle said in the release.
The fixed-rate notes and variable funding notes will not be registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Domino's is an Ann Arbor, Mich.-based pizza chain.
| Issuer: | Domino's Pizza Master Issuer LLC
|
| Issue: | Asset-backed securitization
|
| Amount: | $1,675,000,000
|
| Bookrunners: | Barclays Capital Inc., J.P. Morgan Securities LLC
|
| Pricing date: | Feb. 28
|
| Settlement date: | March 16
|
| Ratings: | Moody's: Baa1
|
| S&P: BBB+
|
| Distribution: | Private placement
|
|
|
| Fixed-rate tranche
|
| Issue: | Series 2012-1 fixed-rate senior secured notes, class A-2
|
| Amount: | $1,575,000,000
|
| Maturity: | Seven years
|
| Coupon: | 5.126%
|
|
|
| Variable tranche
|
| Issue: | Series 2012-1 variable funding senior notes, class A-1
|
| Amount: | $100 million
|
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