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Red Lobster Management increases term loan size to $380 million
By Sara Rosenberg
New York, July 10 – Red Lobster Management LLC lifted its seven-year covenant-light term loan B to $380 million from $375 million, according to a market source.
Pricing on the term loan B is Libor plus 525 basis points with a 1% Libor floor and an original issue discount of 98.
The loan has 101 soft call protection for one year.
Earlier this week, pricing on the B loan was increased from talk of Libor plus 475 bps to 500 bps, the discount widened from 99 and the call protection was extended from six months.
Other changes made earlier included decreasing the free and clear accordion to $50 million from $100 million and revising the unlimited prong to 2.25 times first-lien leverage from 2.5 times, and raising the starting excess cash flow sweep to 75% from 50%.
The company’s now $430 million credit facility (B3/B), up from $425 million, also includes a $50 million revolver.
Recommitments were due at noon ET on Thursday, the source added.
Deutsche Bank Securities Inc., GE Capital Markets and Jefferies Finance LLC are leading the debt.
Proceeds will be used to help fund the buyout of the company by Golden Gate Capital from Darden Restaurants Inc. for $2.1 billion in cash.
Other funds for the transaction will come from a fully executed $1.5 billion sale-leaseback agreement with American Realty Capital Properties Inc.
Closing is expected in Darden’s first fiscal quarter of 2015, subject to customary conditions and regulatory approvals. The transaction is not subject to shareholder approval or financing.
Red Lobster is an Orlando, Fla.-based casual dining seafood restaurant company.
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