Burger King 2013 Annual Report Download - page 51

Table of Contents
We may prepay the 2012 Term Loan Facility in whole or in part at any time without penalty. Additionally, subject to certain exceptions, the 2012 Credit
Facilities are subject to mandatory prepayments in amounts equal to (1) 100% of the net cash proceeds from any non-ordinary course sale or other disposition
of assets (including as a result of casualty or condemnation); (2) 100% of the net cash proceeds from issuances or incurrences of debt by Holdings, BKC or
any of its restricted subsidiaries (other than indebtedness permitted by the 2012 Credit Facilities); and (3) 50% (with stepdowns to 25% and 0% based upon
achievement of specified total leverage ratios) of annual excess cash flow of BKC and its restricted subsidiaries.
As of December 31, 2013, we had no amounts outstanding under the 2012 Revolving Credit Facility. Funds available under the 2012 Revolving Credit
Facility for future borrowings may be used to repay other debt, finance debt or share repurchases, acquisitions, capital expenditures and other general
corporate purposes. We have a $75.0 million letter of credit sublimit as part of the 2012 Revolving Credit Facility, which reduces our borrowing capacity
under this facility by the cumulative amount of outstanding letters of credit. As of December 31, 2013, we had no letters of credit issued against the 2012
Revolving Credit Facility and our remaining borrowing capacity was $130.0 million.
As of December 31, 2013, the interest rate was 2.50% on our outstanding Tranche A Term Loan and 3.75% on our outstanding Tranche B Term Loan.
Interest rate fluctuations applicable to borrowings under the 2012 Credit Agreement attributable to future changes in LIBOR will be partially mitigated by
interest rate caps with a notional value of $1.2 billion.
Based on the amounts outstanding under the 2012 Term Loan Facility and the three-month LIBOR rates as of December 31, 2013, required debt service
for the next twelve months is estimated to be approximately $51.0 million in interest payments and $65.0 million in principal payments.
Senior Notes
As of December 31, 2013 we had outstanding $794.5 million of senior notes due 2018 (the “Senior Notes”) which were issued by BKC. The Senior
Notes bear interest at a rate of 9.875% per annum, which is payable semi-annually on October 15 and April 15 of each year. The Senior Notes mature on
October 15, 2018. Based on the amount outstanding at December 31, 2013, required debt service for the next twelve months on the Senior Notes is $78.5
million in interest payments. No principal payments are due until maturity. BKW, Holdings and all of BKC’s existing direct and indirect domestic
subsidiaries have guaranteed BKC’s obligations under the Senior Notes.
At any time prior to October 15, 2014, BKC may redeem all or part of the Senior Notes at a redemption price equal to 100% of the principal amount of
the Senior Notes redeemed plus the “Applicable Premium” as of, and accrued and unpaid interest, to (but excluding) the redemption date. “Applicable
Premium” means the greater of: (1) 1.0% of the principal amount of the Senior Notes redeemed; and (2) the excess of (a) the present value at such redemption
date of (i) the redemption price of such Senior Notes at October 15, 2014, plus (ii) all required interest payments through October 15, 2014, computed using a
discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over (b) the principal amount of the Senior Notes redeemed. On or
after October 15, 2014, BKC may redeem the Senior Notes at the redemption prices (expressed as percentages of principal amount of the Senior Notes to be
redeemed) set forth below, plus accrued and unpaid interest to (but excluding) the redemption date: October 15, 2014 – October 14, 2015 (104.938%);
October 15, 2015 – October 14, 2016 (102.469%); and October 15, 2016 and thereafter (100%).
During 2012, we repurchased and retired Senior Notes with an aggregate face value of $3.0 million for a purchase price of $3.4 million, including
accrued interest. No Senior Notes were repurchased during 2013. We may periodically repurchase additional Senior Notes in open market purchases or
privately negotiated transactions, subject to our future liquidity requirements, contractual restrictions under our 2012 Credit Agreement and other factors.
Discount Notes
As of December 31, 2013, we had outstanding $453.1 million of senior discount notes due 2019 (the “Discount Notes”), which were issued by Burger
King Capital Holdings, LLC (“BKCH”) and Burger King Capital Finance, Inc. (“BKCF” and together with BKCH, the “Issuers”).
Until April 15, 2016, no cash interest will accrue, but the Discount Notes will accrete at a rate of 11.0% per annum compounded semi-annually such
that the accreted value on April 15, 2016 will be equal to the principal amount at maturity. Thereafter, cash interest on the Discount Notes will accrue at a rate
equal to 11.0% per annum and will be payable semi-annually in cash in arrears on April 15 and October 15 of each year, commencing on October 15, 2016.
The Discount Notes will mature on April 15, 2019. BKW has guaranteed the Issuers’ obligations under the Discount Notes. The Issuers have no operations
or assets other than the interest in Holdings held by BKCH. Accordingly, the cash required to service the Discount Notes is expected to be funded through
distributions from BKC.
49
Source: Burger King Worldwide, Inc., 10-K, February 21, 2014 Powered by Morningstar® Document Research℠
The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this
information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.