First Watch gets replacement facilities, new delayed-draw term loan

By Mary Katherine Stinson

Lexington, Ky., Jan. 8 – FWR Holding Corp., an indirect subsidiary of First Watch Restaurant Group, Inc., amended its credit agreement to obtain replacement facilities and a new incremental delayed draw term loan facility, according to an 8-K filing with the Securities and Exchange Commission.

The amendment replaces its existing $100 million term loan A facility and its existing $75 million revolving credit facility with new facilities of the same amount and provides a new $125 million incremental delayed-draw term loan facility that will be available to First Watch in one or more draws of at least $5 million each for 18 months following closing. The company may opt to reduce the delayed-draw term facility commitments at any time.

In addition, the replacement revolving credit facility was increased by $50 million in new revolving credit commitments, upping the aggregate committed amount to $125 million.

The facilities bear interest at SOFR plus a credit spread adjustment of 10 basis points plus an additional margin that ranges between 250 bps and 325 bps depending on the total rent adjusted net leverage ratio.

Beginning on the last day of the first full fiscal quarter after closing, the 2024 initial term loans amortize at 2.5% per annum for the first year, increasing to 5% annually for the second and third years, 7.5% annually for the fourth year and 10% annually after.

Beginning on the last day of the first full fiscal quarter after the date on which 50% or more of the commitments in respect of the delayed-draw term facility have been funded, the delayed-draw term loans drawn prior to the first term out date will amortize at the same rate as the initial term loans. Beginning on the earlier of the date that 100% of the delayed-draw term facility commitments are funded and 18 months after closing, the previously drawn delayed-draw term loans will amortize at the same rate as the initial term loans.

The facilities mature on Jan. 5, 2029.

Proceeds of the delayed-draw facility may be used to directly or indirectly finance permitted acquisitions (including working capital, earn‑outs and/or purchase price adjustments) of franchisees, directly or indirectly finance new restaurant capital expenditure, repay revolving loans and/or replenish balance sheet cash used for such permitted acquisitions or capital expenditures and to pay related fees and expenses.

Bank of America, NA is the administrative agent and collateral agent.

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

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