Bloomin’ Brands unit enters swap agreements totaling $200 million

By William Gullotti

Buffalo, N.Y., Dec. 6 – Bloomin’ Brands Inc.’s wholly owned subsidiary OSI Restaurant Partners, LLC entered into six interest rate swap agreements with five counterparties on Dec. 5 to manage its exposure to fluctuations in variable interest rates, according to an 8-K filed with the Securities and Exchange Commission.

The $200 million aggregate notional amount of the transactions is divided into two $100 million portions, each with an effective date of Dec. 29.

The portion with a one-year tenor carries a weighted average fixed interest rate of 4.92% and has a termination date of Dec. 31, 2024.

The second portion, carrying a weighted average fixed interest rate of 4.34%, has a two-year tenor that terminates Dec. 31, 2025.

In connection with the transactions, the company effectively converted $200 million of its outstanding debt from SOFR plus a 10 basis point adjustment and a spread of 150 to 250 bps to the weighted average fixed interest rates described, plus the same 10 bps adjustment and spread. The transactions have an embedded floor of minus 0.1%.

Based on the company’s current debt levels, it expects its capital structure will consist of approximately 70% to 75% fixed-interest-rate debt after giving effect to the swap transactions.

Bloomin’ Brands is a Tampa, Fla.-based casual dining restaurant company.

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