IHOP 2008 Annual Report Download - page 119

DineEquity, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
10. Debt (Continued)
• $675 million of Series 2007-1 Class A-2-II-A Fixed Rate Term Senior Notes that have the benefit
of a financial guaranty insurance policy covering payment of interest when due and payment of
principal at the applicable legal final maturity date. These notes have an expected life of
approximately five years, with a legal maturity of 30 years.
• $650 million of Series 2007-1 Class A-2-II-X Fixed Rate Term Senior Notes, which do not have
the benefit of a financial guaranty insurance policy. These notes have an expected life of
approximately five years, with a legal maturity of 30 years.
• $119 million of Series 2007-1 Class M-1 Fixed Rate Term Subordinated Notes, which do not
have the benefit of a financial guaranty insurance policy. These notes have an expected life of
approximately four years, with a legal maturity of 30 years.
The Applebee’s Indenture includes provisions which accelerate certain of the payment dates which,
if not met, would require the Company to use operating funds to begin to pay down the outstanding
debt. The accelerated payment dates for the Applebee’s securitization are as follows:
Class A-2-II-A Fixed Rate Term Senior Notes ...................... December 2012
Class A-2-II-X Fixed Rate Term Senior Notes ...................... December 2012
Class M-1 Fixed Rate Term Subordinated Notes ..................... December 2012
As of December 31, 2008, there was no acceleration of payment dates.
Series 2007-1 Class A-1 Variable Funding Senior Notes
The Applebee’s securitization also included a $100 million revolving credit facility of Series 2007-1
Class A-1 Variable Funding Senior Notes issued in two classes, with each drawdown allocated between
the two classes on a pro rata basis. The 2007-1 Class A-1-A Variable Funding Notes in an amount up to
$30 million have the benefit of a financial guaranty insurance policy covering payment of interest when
due and payment of principal at the legal final maturity date. The Series 2007-1 Class A-1-X Variable
Funding Notes in an amount up to $70 million do not have the benefit of a financial guaranty
insurance policy. As of December 31, 2008, there was $100 million outstanding under this facility,
consisting of $30.0 million insured and $70.0 million uninsured. As of December 31, 2007, there was
$75 million outstanding under this facility, consisting of $22.5 million insured and $52.5 million
uninsured.
Securitization Structure
All of the Applebee’s November 2007-1 Notes were issued by indirect subsidiaries of Applebee’s
that hold substantially all of the intellectual property, franchising assets and other restaurant assets of
the Applebee’s system and a certificate representing the right to receive a portion of the weekly
residual cash flow remaining in securitization by certain subsidiaries of the Company. The servicing and
repayment obligations related to the Applebee’s November 2007-1 Notes and certain ongoing fees and
expenses, including the premiums payable to the financial guaranty insurance company, are solely the
responsibility of these indirect subsidiaries. Neither DineEquity, Inc., which is the ultimate parent of
each of the subsidiaries involved in the securitization, nor Applebee’s has guaranteed or is in any way
liable for the obligations of the subsidiaries involved in the securitization, including the Applebee’s
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