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Arby's obtains bank financing commitment for RTM acquisition
New York, May 31 - Arby's Restaurant Group, Inc. has received a financing commitment from Citigroup North America, Inc., Bank of America, NA and Credit Suisse to fund new borrowings for its planned acquisition of RTM Restaurant Group.
After the purchase is completed, Arby's expects to have $600 million outstanding under a senior secured term loan, $175 million of capitalized lease obligations and financing obligations and $100 million of availability under a senior secured revolving credit facility.
It expects to complete the acquisition and linked debt refinancings during the third quarter.
Triarc Cos., Inc. announced Tuesday that it will acquire RTM for $175 million in cash plus either 10 million shares of its existing class B common stock, series 1, or 10 million shares of newly created non-voting class B common stock, series 2, that will convert into class B-1.
Triarc is the parent of Arby's Franchise Trust, the franchisor of the Arby's restaurant system.
As part of the transaction, Triarc will provide $135 million cash to fund the acquisition and will consolidate all of its restaurant operations, including RTM, under Arby's Restaurant Group.
Arby's Restaurant Group's financing commitments will cover the remaining cash needed to complete the acquisition, including transaction costs, and to refinance some of its own and RTM's existing debt.
Arby's Restaurant Group is assuming $420 million of net debt and related prepayment expenses, including approximately $185 million of RTM's capitalized lease obligations and financing obligations.
Triarc said it will look into creating a publicly traded restaurant company separate from its asset management business.
Triarc is a New York-based holding company.
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