El Pollo Loco 2016 Annual Report Download - page 73
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EL POLLO LOCO HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Tran saction Costs
Transactioncostsof$1.5millionwereincurredinconnectionwiththeDecember11,2014refinancingandwerecapitalizedandareincludedinotherassetsinthe
accompanyingconsolidatedbalancesheetsandtherelatedamortizationisreflectedasacomponentofinterestexpense,net,intheaccompanyingconsolidated
financialstatements.
Maturities
Therearenorequiredprincipalpaymentspriortomaturityforthe2014Revolver.
7. PRIOR CREDIT AGREEMENTS
OnOctober11,2013,theCompanyrefinanceditsdebt,withEPLenteringinto(i)anewfirstliencreditagreement(the“2013FirstLienCreditAgreement”)that
includeda$190millionseniorsecuredtermloan(the“2013FirstLienTermLoan”)andaseniorsecuredrevolvingcreditfacilityof$15million(the“2013
Revolver”)that,ineachcase,wastomatureinOctober2018,and(ii)anewsecondliencreditagreement(the“2013SecondLienCreditAgreement”and,together
withthe2013FirstLienCreditAgreement,the“2013CreditAgreements”)thatincludeda$100millionsecondlientermloan(the“2013SecondLienTermLoan”
and,togetherwiththe2013FirstLienTermLoan,the“2013TermLoans”)thatwastomatureinApril2019.Theproceedsreceivedfromthe2013TermLoanson
October11,2013,plus$14.4millionofcashonhand,wereusedtopayofftheseniorsecuredfirstliencreditfacilitydueJuly2017and17%secondprioritysenior
securednotesdueJanuary2018(collectively,the“2011FinancingAgreements”)andtopayfeesandexpensesinconnectiontherewith.
The2013CreditAgreementswereexecutedwithIntermediateasguarantor,JefferiesFinanceLLCasadministrativeagent,collateralagent,andalender,and,
solelywithrespecttothe2013FirstLienCreditAgreement,GeneralElectricCapitalCorporationasissuingbank,swinglinelender,andalender,andGECapital
Bankasalender.
First Lien Credit Agreement
Loansunderthe2013FirstLienCreditAgreementboreinterestatanAlternateBaseRateorLIBOR,atEPL’soption,plusanapplicablemargin.Theapplicable
marginrateunderthe2013FirstLienCreditAgreementwas4.25%withrespecttoLIBORloansand3.25%withrespecttoAlternateBaseRateloanswitha1.00%
floorwithrespecttotheLIBORrate.InterestwasdueonloanamountsunderAlternateBaseRateelectionsonamonthlybasisandonloanamountsbearing
interestbasedonLIBORattheendofeachinterestperiodineffect,providedthatwithrespecttoLIBORinterestperiodslongerthanthreemonths,interestwas
payableatthree-monthintervals.The2013FirstLienTermLoanwasissuedatadiscountof$950,000,andthisdiscountwasbeingaccretedoverthetermofthe
loan,usingtheeffectiveinterestmethod.TheunamortizeddiscountatDecember25,2013was$910,000.
The2013FirstLienTermLoanrequiredthatquarterlyprincipalpaymentsof0.25%bemadecommencingMarch26,2014.Obligationsunderthe2013FirstLien
CreditAgreementweresecuredbyafirstprioritylienonsubstantiallyallofEPL’sandIntermediate’sassets.
The2013Revolverprovidedfora$15millionrevolvinglineofcredit.AtDecember25,2013,$7.3millionoflettersofcreditwereoutstandingand$7.7million
wasavailabletoborrowundertherevolvinglineofcredit.
InconjunctionwiththeDecember11,2014,refinancingofEPL’sdebt,the2013FirstLienTermLoanwasrepaidinfull,resultinginanexpenseof$3.9million
relatedtotheremainingunamortizeddeferredfinancecostsandthewriteoffof$0.7millionofunamortizeddiscount.Thesecostswereexpensedandwere
reflectedinlossonearlyextinguishmentofdebtintheaccompanyingconsolidatedstatementsofoperations.
Second Lien Credit Agreement
Loansunderthe2013SecondLienCreditAgreementboreinterestatanAlternateBaseRateorLIBOR,atEPL’soption,plusanapplicablemargin.Theapplicable
marginrateunderthe2013SecondLienCreditAgreementwas8.50%withrespecttoLIBORloansand7.50%withrespecttoAlternateBaseRateloanswitha
1.00%floorwithrespecttotheLIBORrate.InterestwasdueonloanamountsunderAlternateBaseRateelectionsonamonthlybasisandonloanamountsbearing
interestbasedonLIBORattheendofeachinterestperiodineffect,providedthatwithrespecttoLIBORinterestperiodslongerthanthreemonths,interestwas
payableatthree-monthintervals.The2013SecondLienTermLoanwasissuedatadiscountof$1.0million,andthisdiscountwasbeingaccretedoverthetermof
theloan,usingtheeffectiveinterestmethod.TheunamortizeddiscountatDecember25,2013was$962,000.The2013
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