IHOP 2012 Annual Report Download - page 99

DineEquity, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
8. Long-Term Debt (Continued)
81
9.5% Senior Notes due 2018
On October 19, 2010, the Company issued $825.0 million aggregate principal amount of its 9.5% Senior Notes due October 30,
2018 (the "Notes") pursuant to an Indenture (the "Indenture"), by and among the Company, the Guarantors and Wells Fargo Bank,
National Association, as trustee (the "Trustee"). The Notes are unsecured senior obligations of the Company and are jointly and
severally guaranteed on a senior unsecured basis by the Guarantors under the Credit Agreement.
Interest/Effective Interest
The Notes bear interest at the rate of 9.5% per annum. Interest on the Notes is payable on April 30 and October 30 of each
year, beginning on April 30, 2011. Taking into account fees and expenses associated with the Notes that will be amortized as
additional non-cash interest expense over an eight-year period, the weighted average effective interest rate for the Notes as of
December 31, 2012 was 10.9%.
Prepayment
The Company may redeem the Notes for cash in whole or in part, at any time or from time to time, on and after October 30,
2014, at specified redemption premiums, plus accrued and unpaid interest, as specified in the Indenture. In addition, prior to
October 30, 2014, the Company may redeem the Notes for cash in whole or in part, at any time and from time to time, at a
redemption price equal to 100% of the principal amount plus accrued and unpaid interest and a "make-whole" premium, as specified
in the Indenture. In addition, prior to October 30, 2013, the Company may redeem up to 35% of the aggregate principal amount
of Notes issued with the net proceeds raised in one or more equity offerings. If the Company undergoes a change of control under
certain circumstances, the Company may be required to offer to purchase the Notes at a purchase price equal to 101% of the
principal amount plus accrued and unpaid interest. If the Company sells assets under certain circumstances, the Company may be
required to offer to purchase the Notes at a purchase price equal to 100% of the principal amount plus accrued and unpaid interest.
Covenants/Restrictions
The Indenture limits the ability of the Company and its restricted subsidiaries to incur additional indebtedness (excluding
certain indebtedness under the Credit Facility), issue certain preferred shares, pay dividends and make other equity distributions,
purchase or redeem capital stock, make certain investments, create certain liens on its assets to secure certain debt, enter into
certain transactions with affiliates, agree to any restrictions on the ability of the Company's restricted subsidiaries to make payments
to the Company, merge or consolidate with another company, transfer and sell assets, engage in business other than certain permitted
businesses and designate its subsidiaries as unrestricted subsidiaries, in each case as set forth in the Indenture. These covenants
are subject to a number of important limitations, qualifications and exceptions, including that during any time that the Notes
maintain investment grade ratings, certain of these covenants will not be applicable to the Notes.
The Indenture also contains customary event of default provisions including, among others, the following: default in the
payment of the principal of the Notes when the same becomes due and payable; default for 30 days in the payment when due of
interest on the Notes; failure to comply with certain covenants in the Indenture, in some cases without notice from the Trustee or
the holders of Notes; and certain events of bankruptcy or insolvency with respect to the Company or any significant restricted
subsidiary, in each case as set forth in the Indenture. In the case of an event of default, other than a bankruptcy default with respect
to the Company, the Trustee or the holders of at least 25% in aggregate principal amount of the Notes then outstanding, by written
notice to the Company (and to the Trustee if the notice is given by the holders of the Notes), may, and the Trustee at the written
request of the holders of at least 25% in aggregate principal amount of the Notes then outstanding shall, declare the principal of
and accrued interest on the Notes to be immediately due and payable.
Registration Rights Agreement for 9.5% Senior Notes due 2018
On October 19, 2010, in connection with the issuance of the Notes, the Company entered into a Registration Rights Agreement
(the "Registration Rights Agreement"), by and among the Company, the Guarantors and Barclays Capital Inc. and Goldman,
Sachs & Co., as representatives of the initial purchasers of the Notes.
Pursuant to the Registration Rights Agreement, the Company and the Guarantors agreed to register with the SEC, exchange
notes (the "Exchange Notes"), having substantially identical terms as the Notes, as part of an offer to exchange freely tradable
Exchange Notes for the Notes. Pursuant to the Registration Rights Agreement, the Company and the Guarantors agreed to use
their commercially reasonable efforts to file an exchange offer registration statement with the SEC within 210 days from October
19, 2010, and to use their commercially reasonable efforts to cause it to become or be declared effective by the SEC no later than