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Recipe Unlimited Corp
Symbol C : RECP
Shares Issued 27,235,177
Close 2019-04-29 C$ 27.00
Recent Sedar Documents

Recipe Unlimited prices $250-million private placement

2019-04-29 19:24 ET - News Release

Mr. Ken Grondin reports

RECIPE UNLIMITED ANNOUNCES $250 MILLION PLACEMENT OF 10-YEAR SENIOR SECURED NOTES AND EXTENSION OF ITS EXISTING $550 MILLION SYNDICATED BANK CREDIT FACILITY

Recipe Unlimited Corp. has priced $250-million 10-year senior secured first-lien notes due 2029 by way of a private placement, and the company is amending and extending its existing $550-million syndicated bank credit facility.

The 10-year notes -- $250-million

The company is issuing the 10-year notes to secure long-term capital at favourable terms. The notes have a fixed coupon and will bear interest from their date of issue at a rate of 4.719 per cent per annum, payable semi-annually, and will mature on May 1, 2029 (a 10-year term). Closing of the note offering is expected to occur on or around May 1, 2019, subject to the satisfaction of certain customary closing conditions. The company will use the net proceeds of the note offering to reduce current borrowings under the company's existing credit facility.

The notes shall rank pari passu in right of payment with the lenders under the company's new credit facility, will be secured on a first-lien basis against the assets that secure the company's new credit facility and shall be guaranteed by all material subsidiaries of the company on the same basis as the new credit facility.

New credit facility -- $550-million

In conjunction with the note offering, the company is amending and extending the terms of its existing $550.0-million syndicated bank credit facility. The new credit facility will be composed of a $400.0-million revolving credit facility that matures on May 1, 2024 (five years), plus a $150.0-million revolving facility that matures on May 1, 2022 (three years). In addition, the new credit facility includes a $250.0-million uncommitted accordion feature that can be applicable to either revolver under the company's existing credit facility (subject to future lender approval).

The interest rate applied on amounts drawn by the company under its new credit facility will be the effective banker acceptance rate or prime rate plus a spread. The spread is based on the company's total financed net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) ratio, as defined in the new credit facility, measured using EBITDA for the four most recently completed fiscal quarters. The company's existing credit facility is being amended to remove certain covenants and restrictions, to include more flexible remaining covenants, and to lower borrowing rates, all of which better reflect Recipe's current strong financial position. Borrowing rate savings of approximately 0.25 per cent to 0.30 per cent will be achieved at most total debt to EBITDA pricing levels under the new credit facility on a go-forward basis.

The notes -- secondary market trading

About Recipe Unlimited Corp.

Founded in 1883, Recipe Unlimited (formerly Cara Operations Ltd.) is Canada's oldest and largest full-service restaurant company. The company franchises and/or operates some of the most recognized brands in the country, including Swiss Chalet, Harvey's, St-Hubert, The Keg, Milestones, Montana's, Kelsey's, East Side Mario's, New York Fries, Prime Pubs, Bier Markt, Landing, Original Joe's, State & Main, Elephant & Castle, The Burger's Priest, The Pickle Barrel and 1909 Taverne Moderne. Recipe's iconic brands have established the organization as a nationally recognized franchisor of choice. As at Dec. 30, 2018, Recipe had 21 brands and 1,382 restaurants, 85 per cent of which are operated by franchisees and joint venture partners.

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