For Benihana, what is the duration that the $50.0 million delayed draw term facility is available to draw?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
dment to the Credit Agreement that:
- Allows for a new $50.0 million delayed draw term facility, available to draw for twelve months and subject to a 1.75x Net Leverage Ratio incurrence test (as defined in the Credit Agreement) for permitted a
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the company borrowed $50.0 million on a delayed draw term facility on December 28, 2022. The loan is structured to be paid back in quarterly installments of $0.25 million, starting on December 31, 2023. The final payment for this loan is scheduled for August 2026.
This indicates that the delayed draw term facility, which Benihana accessed, has a repayment schedule spanning from December 31, 2023, to August 2026. This information is relevant to potential franchisees as it provides insight into the company's financial obligations and how they manage their debt. Understanding the terms of these loans can help franchisees assess the financial stability and long-term planning of Benihana.
The loan's interest rate is based on the SOFR rate, with a 1.00% floor, plus an interest rate margin of 6.50%. This means that the interest rate Benihana pays on the loan is variable and tied to a benchmark rate, which could fluctuate over time. As of December 31, 2023, the company's weighted average interest rate on borrowings under the amended Credit Agreement was 12.40%, compared to 10.31% on December 31, 2022. This increase in the interest rate could impact Benihana's profitability and cash flow, which in turn could affect the resources available to support franchisees.