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Expects Annualized Interest Savings of Approximately $1.3 Million Authorizes Additional 10 Million Shares to be Repurchased
SPARTANBURG, S.C., April 25, 2013 (GLOBE NEWSWIRE) -- Denny's Corporation (Nasdaq:DENN), one of America's largest full-service family restaurant chains, today announced that it has entered into a new five-year $250 million senior secured bank credit facility, comprised of a $60 million term loan and a $190 million revolving line of credit. At the time of closing there were $105 million of borrowings under the new revolving line of credit.
The refinanced facility has a reduced interest rate starting at LIBOR plus 200 basis points for the term loan and revolver compared to the prior facility which had an interest rate of LIBOR plus 275 basis points. The term loan will be amortized 5% per year in the first two years, 7.5% in the subsequent two years and 10% in the fifth year with the balance due at maturity. This translates to minimum payments of $3 million to $6 million per year, compared to its old facility which had a $19 million per year amortization requirement. In addition, the Company will have the opportunity to further reduce the interest rates on the facility by achieving lower leverage ratios which would also result in further enhancing its financial flexibility.
The refinancing is expected to result in annualized interest expense savings of approximately $1.3 million. The Company estimates that the closing of its new bank facility will result in a one-time charge to other nonoperating expense of approximately $1.2 million in the second quarter of 2013, as a result of charges for the unamortized portion of deferred financing costs related to the prior facility and portion of the fees related to the new facility.
New Share Repurchase Authorization
The Company's Board of Directors approved a new share repurchase program authorizing the repurchase of an additional 10 million shares of its Common Stock, in addition to repurchases previously authorized. Under this authorization, the Company may purchase its Common Stock from time to time in the open market or in privately negotiated transactions. The amount and timing of any purchases will depend upon a number of factors, including the price and availability of the Company's shares, trading volume and general market conditions