Wendy's 2009 Annual Report Download - page 106

An indenture for the Senior Notes dated as of June 23, 2009 (the “Indenture”) among Wendy’s/Arby’s
Restaurants, the Guarantors and U.S. Bank National Association, as trustee (the “Trustee”), includes certain
customary covenants that, subject to a number of important exceptions and qualifications, limit the ability
of Wendy’s/Arby’s Restaurants and its restricted subsidiaries to, among other things, incur debt or issue
preferred or disqualified stock, pay dividends on equity interests, redeem or repurchase equity interests or
prepay or repurchase subordinated debt, make some types of investments and sell assets, incur certain liens,
engage in transactions with affiliates (except on an arms-length basis), and consolidate, merge or sell all or
substantially all of their assets. The covenants generally do not restrict Wendy’s/Arby’s or any of its
subsidiaries that are not subsidiaries of Wendy’s/Arby’s Restaurants.
(b) The Arby’s Credit Agreement was amended and restated as of March 11, 2009 and includes an amended
senior secured term loan (the “Amended Term Loan”) and an amended senior secured revolving credit
facility (the “Amended Revolver”). As a result of an agreement entered into on March 17, 2009, the
amount of the senior secured revolving credit facility increased from $100,000 to $170,000. Also, Wendy’s
and certain of its affiliates became co-obligors in addition to Arby’s and certain of its affiliates. The
Amended Term Loan is due July 2012 and the Amended Revolver expires in July 2011.
On June 10, 2009, Wendy’s/Arby’s Restaurants entered into an Amendment No. 1 to the amended and
restated Arby’s Credit Agreement (as so amended, the “Credit Agreement”) which, among other things (1)
permitted the issuance by Wendy’s/Arby’s Restaurants of the Senior Notes described above and the
incurrence of debt thereunder, and permitted Wendy’s/Arby’s Restaurants to dividend to Wendy’s/Arby’s
the net cash proceeds of the Senior Notes issuance less $132,500 used to prepay the Amended Term Loan
and pay accrued interest thereon and certain other payments, (2) modified certain total leverage financial
covenants, added certain financial covenants based on senior secured leverage ratios and modified the
minimum interest coverage ratio, (3) permitted the prepayment at any time prior to maturity of certain
senior notes of Wendy’s and eliminated certain incremental debt baskets in the covenant prohibiting the
incurrence of additional indebtedness and (4) modified the interest margins to provide that the margins
will fluctuate based on Wendy’s/Arby’s Restaurants’ corporate credit rating. Wendy’s/Arby’s Restaurants
incurred approximately $3,107 in costs related to Amendment No. 1.
The Amended Term Loan and amounts borrowed under the Amended Revolver under the Credit
Agreement bear interest at our option at either (i) the Eurodollar Rate (as defined in the Credit
Agreement), as adjusted pursuant to applicable regulations (but not less than 2.75%), plus an interest rate
margin of 4.00%, 4.50%, 5.00% or 6.00% per annum, depending on Wendy’s/Arby’s Restaurants’
corporate credit rating, or (ii) the Base Rate (as defined in the Credit Agreement), which is the higher of
the interest rate announced by the administrative agent for the Credit Agreement as its base rate and the
Federal funds rate plus 0.50% (but not less that 3.75%), in either case plus an interest rate margin of
3.00%, 3.50%, 4.00% or 5.00% per annum, depending on Wendy’s/Arby’s Restaurants’ corporate credit
rating. Based on Wendy’s/Arby’s Restaurants’ corporate credit rating at the effective date of Amendment
No. 1 and as of January 3, 2010, the applicable interest rate margins available to us were 4.50% for
Eurodollar Rate borrowings and 3.50% for Base Rate borrowings. Since the effective date of Amendment
No. 1 and as of January 3, 2010, we have elected to use the Base Rate which resulted in a rate of 7.25% as
of January 3, 2010.
The obligations under the Credit Agreement were secured by substantially all of the assets, other than real
property, of the Wendy’s and Arby’s restaurants segments which had an aggregate net book value of
approximately $2,227,682 as of January 3, 2010 and were also guaranteed by substantially all of the
entities comprising the Wendy’s and Arby’s restaurants segments. In addition, the Credit Agreement
contained various covenants relating to the Wendy’s and Arby’s restaurants segments, the most restrictive
of which (1) require periodic financial reporting, (2) require meeting certain leverage and interest coverage
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Wendy’s/Arby’s Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)