First Watch gets $100 million term loan A, $75 million revolver

By Marisa Wong

Los Angeles, Oct. 6 – FWR Holding Corp., an indirect subsidiary of First Watch Restaurant Group, Inc., entered into a credit agreement on Oct. 6 with Bank of America, NA as administrative agent for a $100 million term loan A facility and a $75 million revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Loan proceeds were used to repay debt outstanding under the company’s credit agreement dated Aug. 21, 2017 with Golub Capital Markets LLC as administrative agent.

The new term loan and revolver mature on Oct. 6, 2026.

The term loan is subject to quarterly amortization beginning on March 28, 2022 at 2.5% of the principal amount in the first fiscal year after the initial amortization date, 5% in the second and third years, 7.5% in the fourth year and 10% in the fifth year. The remaining aggregate principal amount outstanding is payable at maturity.

Interest for the term loan and revolver is equal to Libor plus a margin of between 225 basis points and 300 bps, depending on the total rent adjusted net leverage ratio. The margin is initially 250 bps.

In addition, FWR will pay an unused commitment fee of between 25 bps and 50 bps on the undrawn commitments under the revolver, also depending on the total rent adjusted net leverage ratio.

The credit agreement contains Libor fallback language.

The facilities are guaranteed by all of FWR’s wholly owned domestic restricted subsidiaries and by AI Fresh Parent, Inc., the direct parent company of FWR, and are secured by associated collateral agreements that pledge a lien on substantially all of FWR’s assets.

BofA Securities, Inc. and PNC Bank, NA are the joint lead arrangers and joint bookrunners with PNC Bank as syndication agent. MUFG Bank Ltd. and Synovus Bank are co-documentation agents.

Bradenton, Fla.-based First Watch operates and franchises restaurants primarily focused on breakfast foods.

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