By Paul A. Harris
Portland, Ore., March 10 - Hooters Restaurants priced an upsized $180 million issue of six year senior secured notes (B3/B/) at par to yield 11¼% on Thursday, according to an informed source.
The yield printed at the tight end of the 11¼% to 11½% price talk.
Jefferies & Co. ran the books for the issue, which was upsized from $165 million.
The notes feature a make-whole call at Treasuries plus 50 basis points until April 1, 2014, after which they become callable at par plus ½ of the coupon, or 105.625. However a special call provision allows the issuer to redeem 10% of notes annually at 103 during the non-call period.
The notes were issued via HOA Restaurant Group, LLC, a subsidiary of the ultimate parent, HOA Holdings LLC, and via HOA Finance Corp., a financing unit of HOA Restaurant Group.
The Atlanta-based owner, operator and franchisor of casual dining restaurants will use the proceeds to repay its existing term loan and to redeem sponsor mezzanine debt. The additional $15 million of proceeds will be used to fund a dividend.
| Issuers: | HOA Restaurant Group and HOA Finance Corp. (Hooters Restaurants)
|
| Amount: | $180 million, increased from $165 million
|
| Maturity: | April 1, 2017
|
| Securities: | Senior secured notes
|
| Bookrunner: | Jefferies & Co.
|
| Coupon: | 11¼%
|
| Price: | Par
|
| Yield: | 11¼%
|
| Call features: | Make-whole call at Treasuries plus 50 bps until April 1, 2014, then callable at 105.625, 102.813, par on and after April 1, 2016 (Special call provision allows issuer to redeem 10% of notes annually at 103 during the non-call period)
|
| Equity clawback: | 35% at 111.25 until April 1, 2014
|
| Change-of-control put: | 101%
|
| Trade date: | March 10
|
| Settlement date: | March 21
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 11¼% to 11½%
|
| Marketing: | Roadshow
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