Inspire Brands to price $500 million secured notes on Monday; initial guidance high 7% area

By Paul A. Harris

Portland, Ore., May 18 – Inspire Brands plans to price a $500 million offering of five-year senior secured notes (existing ratings B3/B) in a Monday drive-by following a late-morning conference call with investors, according to market sources.

Initial guidance has the notes coming to yield in the high 7% area, a trader said.

Joint bookrunner Barclays will bill and deliver. BofA Securities Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Wells Fargo Securities LLC and KeyBanc Capital Markets Inc. are also joint bookrunners. Rabo Securities is the co-manager.

The Rule 144A for life notes become callable after two years at par plus 50% of the coupon. They feature a 40% equity clawback at par plus the coupon during the non-call period and a 101% poison put.

The notes are secured by a first priority lien on the same collateral that secures the company’s senior secured credit facilities.

The Atlanta-based multi-brand restaurant company plans to use the proceeds for general corporate purposes, which may include repaying a portion or all of the outstanding balance under its revolver, and debt of securitization entities. Proceeds will also be used as additional liquidity for working capital, capital expenditures and/or potential acquisitions.

The issuing entity will be IRB Holdings Corp.

Inspire Brands owns the Arby's, Buffalo Wild Wings, Jimmy John's, Rusty Taco and Sonic Drive-In brands.

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