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Table of Contents
EL POLLO LOCO HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
7. PRIOR CREDIT AGREEMENTS
On October 11, 2013, the Company refinanced its debt, with EPL entering into (i) a new first lien credit agreement (the “2013 First Lien Credit
Agreement”) that included a $190 million senior secured term loan (the “2013 First Lien Term Loan”) and a senior secured revolving credit
facility of $15 million (the “2013 Revolver”) that, in each case, was to mature in October 2018, and (ii) a new second lien credit agreement (the
“2013 Second Lien Credit Agreement” and, together with the 2013 First Lien Credit Agreement, the “2013 Credit Agreements”) that included a
$100 million second lien term loan (the “2013 Second Lien Term Loan” and, together with the 2013 First Lien Term Loan, the “2013 Term
Loans”)
that were to mature in April 2019. The proceeds received from the 2013 Term Loans on October 11, 2013, plus $14.4 million of cash on
hand, were used to pay off the senior secured first lien credit facility due July 2017 and 17% second priority senior secured notes due January
2018 (collectively, the “2011 Financing Agreements”) and to pay fees and expenses in connection therewith.
The 2013 Credit Agreements were executed with Intermediate as guarantor, Jefferies Finance LLC as administrative agent, collateral agent, and
a lender, and, solely with respect to the 2013 First Lien Credit Agreement, General Electric Capital Corporation as issuing bank, swing line
lender, and a lender, and GE Capital Bank as a lender.
First Lien Credit Agreement
Loans under the 2013 First Lien Credit Agreement bore interest at an Alternate Base Rate or LIBOR, at EPL’
s option, plus an applicable margin.
The applicable margin rate under the 2013 First Lien Credit Agreement was 4.25% with respect to LIBOR loans and 3.25% with respect to
Alternate Base Rate loans with a 1.00% floor with respect to the LIBOR rate. Interest was due on loan amounts under Alternate Base Rate
elections on a monthly basis and on loan amounts bearing interest based on LIBOR at the end of each interest period in effect, provided that with
respect to LIBOR interest periods longer than three months, interest was payable at three-month intervals. The 2013 First Lien Term Loan was
issued at a discount of $950,000, and this discount was being accreted over the term of the loan, using the effective interest method. The
unamortized discount at December 25, 2013 was $910,000.
The 2013 First Lien Term Loan required that quarterly principal payments of 0.25% be made commencing March 26, 2014. Obligations under
the 2013 First Lien Credit Agreement were secured by a first priority lien on substantially all of EPL’s and Intermediate’s assets.
The 2013 Revolver provided for a $15 million revolving line of credit. At December 25, 2013, $7.3 million of letters of credit were outstanding
and $7.7 million was available to borrow under the revolving line of credit.
In conjunction with the December 11, 2014, refinancing of EPL’
s debt, the 2013 First Lien Term Loan was repaid in full, resulting in an expense
of $3.9 million related to the remaining unamortized deferred finance costs and the write off of $0.7 million of unamortized discount. These
costs were expensed and are reflected in loss on early extinguishment of debt in the accompanying consolidated statements of operations.
Second Lien Credit Agreement
Loans under the 2013 Second Lien Credit Agreement bore interest at an Alternate Base Rate or LIBOR, at EPL’s option, plus an applicable
margin. The applicable margin rate under the 2013 Second Lien Credit Agreement was 8.50% with respect to LIBOR loans and 7.50% with
respect to Alternate Base Rate loans with a 1.00% floor with respect to the LIBOR rate. Interest was due on loan amounts under Alternate Base
Rate elections on a monthly
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