AFC Enterprises Inc., parent company of Popeyes Louisiana Kitchen, has completed a new, five-year, $100 million credit facility.
The completion was made Dec. 23 for the facility, which is comprised of a $40 million term loan and a $60 million revolver. Proceeds from the refinancing efforts were used to square away about $63 million of outstanding principal debt from AFC Enterprises’ previous credit facility.
In 2009, the company completed an amendment and restatement of that 2005 credit facility to initially extend the maturity dates of its revolving credit facility and term loan by two years to May 2012 and May 2013.
“We teamed with our lenders to develop this new facility. The borrowing terms recognize our company’s cash flow strength and performance,” said Mel Hope, AFC Enterprises chief financial officer.
The new facility entails lower interest costs, which is expected to improve the company’s flexibility to create long-term value for its stakeholders. The rate of interest paid under the new facility is 2.8 percent.
In the fourth quarter of 2010, AFC will recognize approximately $0.6 million of interest charges and defer approximately $1 million of fees associated with the refinancing.
Required quarterly principal payments will be $1.25 million for the first two years, $1.5 million for the third and fourth years and $4.5 million in the fifth year.
