Sonic Corp. (NASDAQ: SONC), the nation's largest chain of drive-in restaurants, today announced that certain of its subsidiaries intend to refinance a portion of the 2011-1 Senior Secured Fixed Rate Notes (“2011 Notes”) issued under their securitization debt facility. In that regard, Sonic’s subsidiaries have entered into a commitment letter, dated June 21, 2013, pursuant to which a purchaser has agreed, subject to the conditions contained in the letter, to purchase at par approximately $155 million of 2013-1 Senior Secured Fixed Rate Notes (“2013 Notes”) to be issued under the securitization debt facility. As specified in the commitment letter, the 2013 Notes will have a fixed interest rate of 3.75%, an anticipated contract monthly weighted average life of seven years and a final legal maturity date in 2043. It is anticipated that, subject to market and other conditions, the issuance of the 2013 Notes will close in July of 2013; however, the commitment letter will not expire until August 20, 2013.
The net proceeds from the sale of the 2013 Notes will be used to prepay $155 million of the 2011 Notes at par. The 2013 Notes will be issued pursuant to the securitized financing facility which Sonic's subsidiaries have had in place since May 2011. The 2011 Notes have a fixed interest rate of 5.4% with approximately $450 million outstanding, prior to the prepayment.
It is anticipated that the purchaser will offer and sell the 2013 Notes in the United States pursuant to Rule 144A and outside the United States pursuant to Regulation S under the Securities Act of 1933, as amended. The 2013 Notes will not be registered under the Securities Act of 1933 or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state laws.