Wendy's 2009 Annual Report Download - page 58

Senior Secured Term Loan
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
Amended Revolver increased from $100.0 million to $170.0 million. 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 such debt, and permitted Wendy’s/Arby’s Restaurants to dividend to Wendy’s/Arby’s the net cash proceeds
of the Senior Notes issuance less $132.5 million 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.
The Amended Term Loan and amounts borrowed under the Amended Revolver under the Credit
Agreement bear interest at our option at either (1) 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 (2)
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.
Concurrent with the closing of the issuance of the Senior Notes, we prepaid the Amended Term Loan in
an aggregate principal amount of $132.5 million and accrued interest thereon.
During 2009, we borrowed a net total of $51.2 million under the Amended Revolver, however, no
amounts were outstanding as of January 3, 2010. The Amended Revolver includes a sub-facility for the
issuance of letters of credit up to $50.0 million. The availability under the Amended Revolver as of January 3,
2010 was $136.4 million, which is net of $33.6 million for outstanding letters of credit.
Other Revolving Credit Facilities
Wendy’s U.S. advertising fund has a revolving line of credit of $25.0 million. Neither the Company nor
Wendy’s guarantees this debt. The advertising fund facility was established to fund the advertising fund
operations. The availability under this line of credit as of January 3, 2010 was $20.3 million.
At January 3, 2010, one of Wendy’s Canadian subsidiaries had a revolving credit facility of C$6.0 million
which bears interest at the Bank of Montreal Prime Rate and is guaranteed by Wendy’s. The availability under
this facility as of January 3, 2010 was C$5.7 million.
AFA’s bank line of credit matured and was not renewed as of January 2010. In connection with the
establishment of a revolving loan agreement with ARG discussed above under “Introduction and Executive
Overview—Related Party Transactions,” AFA drew on the ARG line and repaid all amounts outstanding under
its bank line of credit on December 28, 2009.
On December 31, 2009, AFA entered into a revolving loan agreement with ARG. This agreement, which
provided for ARG to make revolving loans of up to $5.5 million to AFA, was amended on February 25, 2010
to provide for revolving loans up to $14.5 million. Under the terms of this agreement, outstanding amounts
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