Domino's Pizza plans to refinance a portion of its outstanding whole business securitization, according to Standard & Poor's.
The restaurant chain originally sold $1.675 billion bonds backed by franchise royalty and license payments in April 2012; the facility consisted of $1.575 billion of fixed-rate notes and $100 million of variable funding notes.
The new securitization, Domino's Series 2015-1 will offer $1.5 billion of fixed-rate notes and the proceeds will be used to prepay and retire 35% of the 2012 Notes. S&P assigned ratings of 'BBB+' to both the $500 million of class A-2-I notes with an anticipated repayment date of October 2020 and the class A-2-II notes with an ARD of October 2025. Both tranches have a final maturity date of October 2045.
The transaction also includes a $125 million variable funding note facility, rated 'BBB+', which replaces an existing $100 million variable funding note facility.
Guggenheim Securities is the lead manager.
Domino's is the second-largest pizza restaurant chain in the world, based on sales and store count. Founded in 1960, the system operates through a network of over 11,600 locations across all 50 states and more than 75 international markets as of December 2014.
Approximately 97% of the store locations are franchised, and the remaining 3% are company-owned. All international stores are currently franchised. Each franchised location operates under a franchise agreement that requires payments to Domino's of an initial franchise fee, unless waived, and a recurring royalty fee.