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CBRL begins exchange offer for LYONs due 2032, plans redemption of new notes
By Jennifer Chiou
New York, March 20 - CBRL Group Inc. announced the start of an offer in which it will issue new zero-coupon senior convertible notes due 2032 in exchange for its Liquid Yield Option Notes due 2032.
The Lebanon, Tenn.-based operator of the Cracker Barrel Old Country Store restaurant chain said it will issue an equal amount of new notes for the LYONs and will also pay an exchange fee of $0.60 per $1,000 principal amount of old notes.
The offer ends at 5 p.m. ET on April 16.
According to CBRL, the primary difference of the new notes will be the addition of a net share settlement feature.
As is the case with the old notes, the new notes will be convertible into 10.8584 shares of CBRL stock. The net share settlement feature will allow the company, upon conversion of a new note, to satisfy a portion of the conversion in cash rather than with shares.
In addition, CBRL will be able to redeem the new notes after giving a 15-day notice, rather than the minimum 30-day notice required by the old notes.
Upon completion of the exchange offer, the company said it intends to redeem the new notes as well as any old notes that remain outstanding.
CBRL said it will use its $200 million delayed-draw term loan or cash on hand for the redemption, which it expects to complete as early as Aug. 3.
On March 6, the company said that noteholders have the right to put back the old notes at a price equal to $475.01 per $1,000 principal amount at maturity until 5 p.m. ET on April 3.
Because each old note is convertible into 10.8584 shares, the put value is the equivalent of $43.75 per associated common share. Based on the March 19 closing price for CBRL stock of $48.44, the conversion value exceeds the put value, and the company said it does not expect holders to exercise their put right.
Global Bondholder Services Corp. is the information agent (call collect 212 430-3774 or 866 470-4300).
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