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Jack in the Box extends credit agreement to 2020, revises covenants
By Sarah Lizee
Olympia, Wash., March 21 – Jack in the Box Inc. amended its credit agreement to extend the maturity date of the term loan facility and revolving credit facility to March 19, 2020 from March 19, 2019.
The company entered into the fourth amendment on Wednesday with Wells Fargo Bank, NA as administrative agent and lead bookrunner, according to an 8-K filing with the Securities and Exchange Commission.
There was no change to the pricing grid for either facility. However, the applicable interest rate was reset to Libor plus 200 basis points for the period from the effective date of the amendment to the first calculation date after that.
Interest is based on the company’s leverage ratio and ranges from Libor plus 125 bps to 225 bps.
The fourth amendment also, among other things, raised the maximum leverage ratio covenant to 4.5 times from 4 times, and allows unlimited cash dividends and share repurchases if pro forma leverage is less than 4 times, from 3.5 times previously, subject also to pro forma fixed-charge covenant compliance.
In connection with the sale of Qdoba Restaurant Corp., the company will make a prepayment of $260 million to retire outstanding debt under its term loan.
Following the amendment and prepayment, about $599.4 million of the $900 million revolving credit facility will be drawn or used for letters of credit and about $365.7 million will remain outstanding on the term loan facility.
The amortization schedule for the term loan facility was amended to reflect the Qdoba prepayment and the extended term, the filing noted.
Jack in the Box is a fast-food restaurant company based in San Diego.
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