FREE MEMBERSHIP Includes » ABL Advisor eNews + iData Blasts | JOIN NOW ABLAdvisor Gray ABLAdvisor Blue
Skip Navigation LinksHome / News / Read News


JPMorgan Chase Agents Papa John’s Revolving Credit Facility Increase to $600MM

September 16, 2021, 08:03 AM
Filed Under: Restaurant

Papa John’s International successfully completed its previously announced senior notes offering and the refinancing of its revolving credit facility, providing the Company with enhanced financial flexibility and additional liquidity. The transaction marks another significant step toward strengthening and aligning Papa John’s balance sheet and capital allocation priorities with its improving growth outlook and cash-generation potential.

The Company closed its previously announced offering of $400 million aggregate principal amount of 3.875% senior notes due 2029 (the “Notes”) in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended. The Notes are guaranteed by each of Papa John’s domestic restricted subsidiaries that are guarantors or borrowers under its Amended Credit Agreement (as defined below).

Concurrently with the closing of the offering of the Notes, Papa John’s amended and restated its existing credit agreement (the “Amended Credit Agreement”) with JPMorgan Chase Bank as administrative agent, and the other lenders party thereto. Pursuant to the Amended Credit Agreement, Papa John’s revolving credit facility has been increased to an aggregate principal amount of $600 million and the maturity has been extended for an additional five-year term.

The net proceeds from the offering of the Notes, together with borrowings under the amended revolving credit facility, were used to repay outstanding borrowings under the Company’s existing revolving credit facility and term loan facility and to pay all related fees and expenses.

“As Papa John’s has transformed itself into an innovation-driven, growth brand, we have also made progress aligning our balance sheet and capital allocation priorities to support and accelerate our positive outlook,” said Ann Gugino, Papa John’s Chief Financial Officer. “We are committed to a balanced approach, having significantly increased growth investments and capital returns to shareholders over the past year, as well as simplifying our balance sheet. This refinancing locks in attractive interest rates for the long term, while maintaining an efficient cost of capital.”

Over the past 12 months Papa John’s other significant steps to optimize its financial policies and capital allocation priorities, in addition to the refinancing, include:

  •     Significantly increasing investments in high-return organic growth opportunities, including new Company-owned stores and technology;
  •     Converting and repurchasing the Company’s Series B Convertible Preferred Stock, thus simplifying the balance sheet, reducing the Company’s cost of capital and gaining flexibility for the future; and
  •     Raising the annual dividend rate 56% to $1.40 per share, approximately in line with the median yield for the S&P 500, and authorizing a $75 million share repurchase program.

Comments From Our Members

You must be an ABL Advisor member to post comments. Login or Join Now.