Ruth's Hospitality loan amendment to extend maturity now effective

By Sara Rosenberg

New York, Feb. 16 - Ruth's Hospitality Group Inc.'s credit facility amendment became effective, according to a news release, reducing the revolver to $130 million from $175 million and extending the maturity by two years to February 2015.

In addition, the amendment provides for no financial covenant testing until the end of fiscal year 2010, less restrictive leverage and coverage covenants thereafter, and permanently eliminates the minimum EBITDA covenant.

Pricing on the amended facility was increased to a range of Libor plus 325 basis points to 500 bps based on leverage.

The amendment was conditioned on the successful completion of a private investment in public equity transaction and a rights offering that raise a total of at least $42.5 million in net proceeds, and the repayment of bank debt with those proceeds.

On Tuesday, the company announced that it completed its sale of $25 million of newly created series A 10% convertible preferred stock to Bruckmann, Rosser, Sherrill & Co. Management LP in a private placement transaction.

The company also closed on the sale of 10.15 million shares of its common stock at a subscription price of $2.50 per share, for an aggregate purchase price of about $25.4 million.

On Feb. 12, the company applied roughly $44.3 million of the net proceeds from the rights offering and the private placement, together with cash on hand, to reduce its outstanding borrowings under its existing credit facility.

After giving effect to this repayment, outstanding borrowings under the credit facility were approximately $78.75 million, with about $47.35 million available for future borrowing, net of $3.5 million in outstanding letters of credit.

Ruth's is a Heathrow, Fla.-based restaurant company focused exclusively on the upscale dining segment.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.