GPS Hospitality starts roadshow for $385 million seven-year secured notes, whisper low 7% area

By Paul A. Harris

Portland, Ore., Aug. 3 – GPS Hospitality Holding Co. LLC began a roadshow on Tuesday for a $385 million offering of seven-year senior secured notes, according to market sources.

The deal, which was set to kick off on a Tuesday conference call with investors, is in the market with initial guidance in the low 7% area, a trader said.

UBS Securities LLC is the left lead bookrunner. KKR is the joint bookrunner.

The Rule 144A and Regulation S for life notes become callable after three years at par plus 50% of the coupon.

Credit ratings are expected from Moody's Investors Service, S&P Global Ratings and Fitch Ratings.

The Atlanta-based restaurant franchisee plans to use the proceeds to fully repay the $251 million outstanding under its existing credit facility, fully redeem its preferred units for $101 million, repay its swap for $16 million, fully satisfy its outstanding junior return for $4 million, and use the remaining proceeds for general corporate purposes.

The co-issuer will be GPS Finco Inc.

The company's portfolio includes Burger King, Pizza Hut, and Popeye's.

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