Zaxby’s discloses price talk on first- and second-lien term loans

By Sara Rosenberg

New York, Dec. 1 – Zaxby’s Operating Co. LP announced price talk on its $625 million seven-year covenant-lite first-lien term loan B and $250 million eight-year covenant-lite second-lien term loan in connection with its lender call on Tuesday, according to a market source.

Price talk on the first-lien term loan is Libor plus 400 basis points to 425 bps with a 25 bps step-down upon consummation of an initial public offering, a 0.75% Libor floor and an original issue discount of 99, and talk on the second-lien term loan is Libor plus 750 bps with a 0.75% Libor floor and a discount of 98.5, the source said.

The first-lien term loan has 101 soft call protection for six months. The second-lien term loan has hard call protection of 102 in year one and 101 in year two, or 101 in year one and par thereafter for any prepayment or refinancing in connection with a whole-business securitization.

Amortization on the first-lien term loan is 1% per annum.

The company’s $975 million of senior secured credit facilities also include a $100 million five-year revolver.

Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC, KeyBanc Capital Markets and Fifth Third are the joint lead arrangers and bookrunners on the deal. Morgan Stanley is the administrative agent.

Commitments are due at 5 p.m. ET on Dec. 10, the source added.

Proceeds will be used to help fund Goldman Sachs Merchant Banking Division’s acquisition of a significant stake in the company.

Closing is expected by year-end.

Zaxby’s is an Athens, Ga.-based casual restaurant chain.

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