Wendy's/Arby's looking to combine credit facilities into one amended deal

By Sara Rosenberg

New York, March 2 - Wendy's/Arby's Group Inc. is in the process of trying to combine its Wendy's International Inc. and Arby's Restaurant Group Inc. bank debt into one amended credit facility, company officials said in a conference call on Monday.

As a result of this transaction, the company expects that the interest rate of Libor plus 225 basis points that it is currently paying on the Arby's loan will go up.

However, the thought is that the overall financial flexibility and maintenance of financial covenant compliance in 2009 that will be gained by the creation of one facility are worth the increased pricing, officials explained in the call.

The single credit facility would use Wendy's and Arby's combined results and more moderately leveraged balance sheet to determine covenant compliance, and would enhance the company's ability to manage and deploy cash.

Under the combined model, the 2008 ratio of long-term debt/pro forma adjusted EBITDA was below 3.0 times.

The company anticipates completing this amendment in advance of filing its 2008 form 10-K.

Wendy's/Arby's is an Atlanta-based quick-service restaurant company.

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