What is the anticipated repayment date for the Series 2020-1 Class A-2 Notes issued by Carls?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
event, will fall under one of the three scenarios described above. The Series 2018-1 Variable Funding Notes require us to pay a commitment fee of 0.50% per annum for unused commitments and letter of credit fees of 3.00% per annum on our outstanding non-cash collateralized letters of credit. Interest and other fees on the Series 2018-1 Variable Funding Notes are due quarterly in arrears on the 20th day of each March, June, September and December. As of January 31, 2024, we had no outstanding loan borrowings, $22,647 of outstanding letters of credit and remaining availability of $47,353 under our Series 2018-1 Variable Funding Notes.
On December 21, 2020, we paid down the entire outstanding principal balance of our Series 2018-1 Class A-2-I Notes with the issuance of an aggregate principal amount of $400,000 of Series 2020-1 3.981% Fixed Rate Senior Secured Notes, Class A-2 (the "Series 2020-1 Class A-2 Notes"). Our Series 2018-1 4.959% Fixed Rate Senior Se
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the Series 2020-1 Class A-2 Notes have an anticipated repayment date of December 2027. These notes, with an aggregate principal amount of $400,000, were issued on December 21, 2020, with a fixed interest rate of 3.981%. The legal final maturity date for these notes is December 2050.
Carls's subsidiaries, Carl's Jr. Funding LLC and Hardee's Funding LLC, are the co-issuers of these notes. The Series 2020-1 Class A-2 Notes were issued to pay down the entire outstanding principal balance of the Series 2018-1 Class A-2-I Notes. The notes require scheduled quarterly principal payments of $1,000, with the first payment due on March 22, 2021. Interest payments are due quarterly in arrears on the 20th day of March, June, September, and December.
Carls expects to repay or refinance each tranche of the Class A-2 Notes at or before its anticipated repayment date. However, if the co-issuers do not repay any tranche of Class A-2 Notes in full by its anticipated repayment date, such tranche of the Class A-2 Notes would be subject to additional interest at an interest rate of at least 5% per annum, and principal payments on all outstanding Senior Notes would accelerate until the debt is paid in full.
Prospective franchisees should be aware of these debt obligations as they could impact the financial health of Carls and, consequently, the support and resources available to franchisees. Understanding the repayment schedule and potential implications of these notes is crucial for assessing the stability and long-term viability of the franchise system.