Cracker Barrel closes on $750 million five-year credit facility

By Melissa Kory

Cleveland, July 11 - Cracker Barrel Old Country Store, Inc. said that it entered into a $750 million five-year bank credit facility comprised of a $250 million term loan and a $500 million revolving line of credit on Friday.

The new credit facility replaces term loans totaling $575 million and a $165 million revolving line of credit.

The term loan and revolver mature on July 8, 2016. The term loan will amortize in 19 quarterly installments of 1.875% of the original principal amount for the first eight quarters and 2.5% of the original principal amount thereafter, with the remaining balance due upon maturity.

The credit agreement contains customary covenants including restrictions on incurrence of liens, incurrence of additional debt, sales of assets, investments, declarations of dividends and capital expenditures.

The credit agreement also requires maintenance of two financial covenants based upon a ratio of the company's consolidated debt for borrowed money to consolidated EBITDA and a ratio of consolidated EBITDA to consolidated interest expense.

Wells Fargo Securities, LLC, Bank of America Merrill Lynch and SunTrust Robinson Humphrey Inc. are the joint lead arrangers and bookrunners.

Wells Fargo Bank, NA is the administrative agent and collateral agent. Bank of America, NA and SunTrust Bank are co-syndication agents, and Regions Bank, Fifth Third Bank and Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, New York Branch are co-documentation agents.

U.S. Bank, NA, PNC Bank, NA, Union Bank, NA, Branch Banking and Trust Co., Synovus Bank; First Tennessee Bank, NA, Raymond James Bank, FSB, 1st Farm Credit Services, PCA, FCS Financial, PCA, Greenstone Farm Credit Services, ACA/FLCA, AgChoice Farm Credit, ACA and Avenue Bank also participated in the facility.

"This is one of the two largest all-bank financing transactions ever completed by a full-service restaurant company," Lawrence E. Hyatt, the senior vice president and chief financial officer, said in a news release.

"By simplifying and extending the maturities of our financing arrangements, this new credit facility provides us with greater financial flexibility," Hyatt said in the release.

At the time of closing, there were $325 million of borrowings under the new revolver.

The proceeds will be used to refinance existing debt, to provide ongoing working capital and for other general corporate purposes.

Cracker Barrel is a Lebanon, Tenn.-based operator of restaurants.

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