By Susanna Moon
Chicago, Oct. 16 – LRI Holdings, Inc. and wholly owned subsidiary Logan’s Roadhouse, Inc. agreed to exchange about $211.1 million principal amount of 10¾% senior secured notes due 2017 for discount notes with zero or smaller cash interest payments.
In exchange, the holders will receive new notes to be issued by Logan’s Roadhouse and guaranteed by the company, according to an 8-K filing with the Securities and Exchange Commission.
The companies entered into an exchange agreement:
• With Macsen Holdings Ltd. and KEP VI, LLC, or the Kelso entities, to exchange about $106.8 million principal amount of the senior notes on Oct. 14; and
• With FS Investment Corp., Race Street Funding LLC, Cobbs Creek LLC, Burholme Funding LLC and Dunlap Funding LLC, or the GSO entities, for about $104.3 million of notes on Oct. 14.
In exchange, the next day, Logan’s Roadhouse issued $106.1 million of series 2015-1 senior secured zero-coupon notes due 2017 to the Kelso entities.
The company issued about $109.7 million of series 2015-2 senior secured notes due 2017 to the GSO entities.
In addition, after the Oct. 15 closing date, the company said it expects to issue to the Kelso entities about $6.4 million of additional series 2015-1 notes in exchange for the remaining $6.1 million principal amount of senior notes beneficially owned by the Kelso entities plus accrued interest.
The original issue discount on the series 2015-1 notes will have an accretion rate of 10¾% per year, compounded semiannually, beginning April 15, 2016. The series 2015-1 notes will mature on Oct. 16, 2017. No cash interest will accrue on the series 2015-1 notes. The accreted value of each series 2015-1 note will increase from issue until Oct. 16, 2017.
The series 2015-2 notes will have a cash interest rate of 4% per year, payable semiannually in arrears, beginning April 15, 2016. The OID on the series 2015-2 notes will have an accretion rate of 10½% per annum, compounded semiannually, beginning April 15, 2016. The series 2015-2 notes will mature on Oct. 16, 2017.
Logan’s may choose to make optional cash interest payments at a rate of 14½% per year in lieu of both the 4% per year cash interest rate and the 10½% per year accretion rate otherwise required under the series 2015-2 notes. The accreted value of each series 2015-2 note will increase from issue until Oct. 16, 2017.
Other than the maturity date, interest rate, accretion rate, cash toggle and payment terms, the base indenture and the terms of the series 2015-1 notes and the series 2015-2 notes are substantially the same as the notes indenture governing the senior notes, the filing noted.
Logan’s is a Nashville-based restaurant chain.
| Issuer: | Logan’s Roadhouse, Inc.
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| Pricing date: | Oct. 15
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| Kelso bonds
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| Issue: | Series 2015-1 senior secured notes
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| Amount: | $106.1 million
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| Maturity: | Oct. 16, 2017
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| Coupon: | 0%
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| OID: | Accretion rate of 10¾% per year, compounded semiannually, beginning April 15, 2016
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| GSO bonds
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| Issue: | Series 2015-2 senior secured notes
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| Amount: | $109.7 million
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| Maturity: | Oct. 16, 2017
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| Coupon: | 4%; optional cash interest payments at a rate of 14½% per year in lieu of both the 4% per year cash interest rate and the 10½% per year accretion rate
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| OID: | Accretion rate of 10½% per year, compounded semiannually, beginning April 15, 2016
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