IHOP 2008 Annual Report Download - page 121

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DineEquity, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
10. Debt (Continued)
Co-Issuers, including the Series 2007-3 FRN, the March 2007 Notes or any other obligations of the
IHOP Co-Issuers incurred in connection with the issuance of the Series 2007-3 FRN or the March 2007
Notes. The Company does, however, guarantee the performance of International House of
Pancakes, LLC, as servicer for the IHOP securitization program.
All of the Series 2007-3 FRN issued in the IHOP securitization were issued under the IHOP Base
Indenture, as amended and supplemented from time to time, including by the related supplement to
the IHOP Base Indenture dated as of November 29, 2007.
Securitization Structure
The securitization structure for Series 2007-3 FRN is substantially similar to the structure for the
Series 2007-1 FRN and Series 2007-2 VFN.
Third Party Credit Enhancement
The Series 2007-3 FRN does not have any third party credit enhancement.
Covenants/Restrictions
The covenants under the Indenture and applicable to all notes were modified with the consent of
the holders of the Series 2007-1 FRN.
Weighted Average Effective Interest Rate
The weighted average effective interest rate on all of the notes issued in the November 2007
securitization transactions, exclusive of the amortization of fees and expenses associated with the
securitization transactions, is 7.1799%. Taking into account fees and expenses (excluding the interest
rate swap transaction discussed below) associated with the securitization transactions that will be
amortized as additional non-cash interest expense over a five-year period, which is the expected life of
the notes, the weighted average effective interest rate for the notes issued in November 2007
securitization transactions is 8.4571%.
Use of Proceeds
The net proceeds from the sale of the Applebee’s notes and the borrowing under the Series 2007-1
Class A-1 Variable Funding Senior Note on November 29, 2007 were $1,847.4 million, net of expenses.
The proceeds were used to deposit $66 million in various securitization accounts and to distribute
$1,794.4 million to pay the outstanding debt and other third-party obligations of Applebee’s and a
portion of the purchase price for the Applebee’s acquisition.
The IHOP Co-Issuer applied a portion of the net proceeds from the sale of the IHOP notes to
deposit $4.3 million into the Series 2007-3 interest reserve account. The remaining $238.2 million was
used to pay a portion of the purchase price related to the Applebee’s acquisition.
107