Sonic Corp., the drive-in restaurant chain operator, issued $155 million of notes backed by franchising revenue.
In a press release issued last week, the company said that the 2013-1 Senior Secured Fixed Rate Notes, which were issued in a private transaction, have an expected life of seven years and bear interest at 3.75% per annum, payable monthly, with no scheduled principal amortization.
Guggenheim Securities acted as the sole structuring advisor and sole bookrunning manager for the transaction.
Proceeds will be used to repay approximately $155 million of Series 2011-1 Senior Secured Fixed Rate Notes at par, cutting Sonic’s debt servicing costs by $2.0 to $2.5 million per year.
The 2011 Notes have a fixed interest rate of 5.4% with approximately $450 million outstanding prior to prepayment.
"We are very pleased that we were able to leverage the strength of our brand and business model to refinance a portion of our debt at a very attractive rate," said Clifford Hudson, chairman and Chief Executive.