Ruby Tuesday seeks revolver amendment to modify size and covenants

By Sara Rosenberg

New York, May 1 - Ruby Tuesday Inc. plans to amend its revolving credit facility to reduce the size to $200 million, revise covenants and allow for the sale of senior notes, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

Covenants under the amended revolver will include a maximum leverage ratio of 4.5 to 1.0 through the fiscal quarter ending on or about June 4, 2013 and 4.25 to 1.0 thereafter, and a minimum fixed charge coverage ratio of 1.75 to 1.0 through and including the fiscal quarter ending on or about June 3, 2014 and 1.85 to 1.0 thereafter.

Also, the amendment will secure the revolver with a lien over the equity interests of certain subsidiaries.

Pricing on the revolver can range from Libor plus 125 basis points to 250 bps and the unused fee can range from 30 bps to 45 bps, based on debt to EBITDAR.

The amendment is being done in connection with the company's proposed senior notes offering, and proceeds from the new debt will be used to pay down all outstanding revolver borrowings, to redeem series B senior notes, to pay off some mortgage loans and for general corporate purposes.

Ruby Tuesday is a Maryville, Tenn.-based developer, operator and franchiser of casual dining restaurants.

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