Drive-in restaurant chain Sonic Corp. said that certain of its subsidiaries are going to refinance their outstanding securitization debt with a new securitization debt facility. The underwriter on the transaction is Barclays Capital.
Its subsidiaries have had a securitized financing facility in place since December 2006, and as of Feb. 28, there was roughly $502 million of notes outstanding under this facility, according to a press release from the company.
The new facility's net proceeds will be used to repay the 2006 notes in full and for general corporate purposes. It is expected that, depending on market and other conditions, the new facility will close this year. The 2006 notes are currently scheduled to be repaid by December 2012.
The notes to be issued under the new securitization facility will be offered and sold to qualified institutional buyers in the U.S. under Rule 144A and outside the country under Regulation S according to the Securities Act of 1933.
In 2006, Sonic completed a $600 million securitized financing by some of its subsidiaries of Fixed Rate Series 2006-1 Senior Notes, Class A-2 in a private deal.
At that time, the company also completed a securitized financing facility of Variable Rate Series 2006-1 Senior Variable Funding Notes, Class A-1 in a private offering, which allowed the issuance of up to $200 million variable funding notes.
The 2006 transaction, which featured a wrap from Ambac, was underwritten by Lehman Brothers and Banc of America.
Sonic securitized revenue streams from its franchise royalty payments, intellectual property rights and some real estate payments in a transaction that then covered 70% of the firm’s earnings before tax.
Paul Weiss advised the underwriters on the 2006 deal while Shearman & Sterling advised the issuer. Jones Day was counsel to Ambac, according to published reports.