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City National Bank Leads $302.8MM Credit Facility Syndication for Meritage Hospitality

August 09, 2021, 07:44 AM
Filed Under: Restaurant

Meritage Hospitality Group announced that the Company and certain of its subsidiaries have in advisory with Auspex Capital, closed on a new $302.8 million senior secured credit facility syndication led by City National Bank.

The new senior credit facility, entered into effective as of August 5, 2021, replaces the Company’s previously existing credit facility due to mature in February 2022. The new $302.8 million credit facility includes term debt of $181.8 million, a development line of credit of $86.0 million and a revolving line of credit of $35.0 million. As required by the new credit agreement, which matures in 2027, the Company entered into a SWAP for a minimum of 50% of its current term debt outstanding. Specifically, the Company is closed on a SWAP in the amount of $120 million at a rate of 0.998% with the same term as the new facility. The new credit facility provides significant cash flow benefits to the Company including, but not limited to, a decrease in base pricing of 40 basis points, increased amortization to 12 years and a decrease in the effective SWAP rate of approximately 1.25%.

The Company continues to invest in significant enhancements to its operating platforms in preparation for continued growth led by renovations, new restaurant development and acquisitions. The expanded credit facility, along with improved terms and conditions, support management’s ability to meet its five year plan of 600 restaurants by 2026, which includes 400 Wendy’s, in-house brands and other QSR brands.

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