Wendy's 2008 Annual Report Download - page 63

Outstanding balance
at December 28, 2008
2009 Principal
Payments
(in millions)
Senior secured term loan (1) .............................. $ 385.0 $ 5.1
6.20% Senior Notes (2) .................................. 199.1 —
6.25% Senior Notes (3) .................................. 188.9 —
Sale-leaseback obligations, excluding interest ............... 123.8 3.6
Capitalized lease obligations, excluding interest (4). . . ....... 106.8 19.4
7% Debentures (5). . . .................................... 79.0 —
Secured bank term loan (6) ............................... 19.8 0.9
California Restaurant Acquisition notes payable (7). . . ....... 5.3 1.2
Convertible notes (8) . .................................... 2.1 —
Other................................................... 1.8 0.2
$1,111.6 $30.4
(1) As of December 28, 2008, the Arby’s Credit Agreement included a senior secured Arby’s Term Loan which
is due in July 2012 and a senior secured revolving credit facility (“the Arby’s Revolver”) of $100.0 million,
which expires in July 2011. During 2008, we borrowed a total of $40.0 million under the Arby’s
Revolver; however, no amounts were outstanding at the end of 2008. The availability under the Arby’s
Revolver as of December 28, 2008 was $92.2 million, which is net of $7.8 million for outstanding letters
of credit. During 2008, we made $143.2 million of voluntary net principal prepayments on the Arby’s
Term Loan to assure compliance with the maximum lease adjusted leverage ratio in the Arby’s Credit
Agreement. The Arby’s Term Loan also required prepayments of principal amounts resulting from certain
events and, on an annual basis, from excess cash flow of the Arby’s restaurant business as determined under
the Arby’s Credit Agreement (the “Excess Cash Flow Payment”). The Excess Cash Flow Payment for fiscal
2007 of $10.4 million was paid in the second quarter of 2008. There will be no Excess Cash Flow Payment
necessary for fiscal 2008. Additionally in 2008, the Company reacquired outstanding Arby’s Term Loans
with an outstanding principal amount of $10.9 million for $7.2 million, which resulted in a gain on early
extinguishment of debt of approximately $3.7 million.
The Arby’s Credit Agreement was amended and restated as of March 11, 2009 and Wendy’s and certain of
its affiliates in addition to ARG and certain of its affiliates became parties (see “Item 1A. Risk Factors—
Risks Related to Wendy’s and Arby’s Businesses—Wendy’s and its subsidiaries, and ARG and its
subsidiaries, are subject to various restrictions, and substantially all of their non-real estate assets are
pledged subject to certain restrictions, under a Credit Agreement”). Wendy’s, Arby’s and certain other
subsidiaries are the co-borrowers (the “Co-Borrowers”) under the amended and restated Credit Agreement.
Under the amended and restated Credit Agreement substantially all of the assets of the Co-Borrowers
(other than real property, except for mortgages on certain Wendy’s real properties), the stock of Wendy’s
and ARG and their domestic subsidiaries and 65% of the stock of their foreign subsidiaries (all subject to
certain exclusions) are pledged as collateral security, and the Co-Borrowers’ obligations are also guaranteed
by substantially all of the domestic entities comprising the Wendy’s and Arby’s restaurant segments
(subject to certain limitations). The amended and restated Credit Agreement also contains covenants that,
among other things, require Wendy’s and ARG and their subsidiaries to maintain certain aggregate
maximum leverage and minimum interest coverage ratios and restrict their ability to incur debt, pay
dividends or make other distributions to Wendy’s/Arby’s, make certain capital expenditures, enter into
certain fundamental transactions (including sales of assets and certain mergers and consolidations) and
create or permit liens.
The amended and restated Credit Agreement includes a senior secured term loan facility (the “Amended
Arby’s Term Loan”), which had $384.0 outstanding as of March 11, 2009, and a senior secured revolving
credit facility of $100.0. The Amended Arby’s Term Loan is due not later than July 2012 and the
revolving credit facility expires in July 2011. The revolving credit facility includes a subfacility for the
issuance of letters of credit up to $50.0 million. As of March 11, 2009, $26.2 of loans were outstanding
and letters of credit in the aggregate amount of $35.1 were issued under the amended and restated Credit
Agreement. The Amended Arby’s Term Loan and amounts borrowed under the revolving credit facility
55