What is the '2017 Senior Credit Facility' for Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| January 1, 2024 (Successor) | January 2, 2023 (Predecessor) | |
|---|---|---|
| Related party note maturing April 25, 2024 bearing interest at LIBOR plus an applicable margin or an alternative base rate plus an applicable margin, Interest is paid quarterly. | $ | $ 181,913 |
| Related party Restatement Date Term Loan maturing April 25, 2023 bearing interest at LIBOR plus an applicable margin or an alternative base rate plus an applicable margin. Interest is paid quarterly. | 2 | 19,244 |
| Related party note maturing April 25, 2025 bearing interest at LIBOR plus an applicable margin or an alternative base rate plus an applicable margin. Interest is capitalized on all payment dates. | 65,126 | |
| Related party amended note maturing April 25, 2025 bearing interest at LIBOR plus an applicable margin or an alternative base rate plus an applicable margin. Interest is capitalized on all payment dates. | 2 | 31,066 |
| Related party revolver maturing April 25, 2025 bearing interest at LIBOR plus an applicable margin or an alternative base rate plus an applicable margin, | + | 1,000 |
| Obligations under premium financing arrangements, with short-term maturities | 1,028 | 1,127 |
| Financing obligations relating to restaurant sales maturing at various dates through October 1, 2039, bearing interest rates ranging from $3.20%$ to $7.06%$ | 7,923 | 8,640 |
| Last-Out Term Loans, maturing June 16, 2028, bearing interest at an alternative base rate plus 8% or the Adjusted Term SOFR plus 9% plus a credit adjustment spread. Company has option to pay interest in kind at a rate equal to 6% rather than in cash. | 76,952 | ) (A) |
| New Money Loans, maturing June 16, 2027, bearing interest at an alternative base rate plus 6% or the Adjusted Term SOFR plus 7% plus a credit adjustment spread. Company has option to pay interest in kind at a rate equal to 4% rather than in cash. | 10,081 | |
| Deferred financing and issuance costs, net | (447) | (4,539) |
| Total debt, financing obligations, and credit facility | 95,537 | 303,577 |
| Less current maturities | (1,879) | (295,004) |
| Total debt, financing obligations, and credit facility, less current maturities | $ 93,658 | $ 8,573 |
Predecessor Debt Agreements
Related Party Credit Facility
On April 25, 2017, Holdings entered into a first lien credit agreement (the "First Lien Credit Agreement") and second lien credit agreement (the "Second Lien Credit Agreement") with Jefferies Finance LLC as administrative agent, joint lead arranger and joint bookrunner, and the financial institutions party thereto. The First Lien Credit Agreement consisted of (i) a $192.5 million First Lien Term Loan maturing on April 25, 2024 and (ii) a $25.0 million Revolver maturing on April 25, 2022. The Second Lien Credit Agreement consisted of an $87.5 million Second Lien Term Loan maturing on April 25, 2025. The First Lien Term Loan and Second Lien Term Loan are collectively referred to as the "Term Loans" or the "2017 Senior Credit Facility". The proceeds from the Term Loans were used to fund the Merger.
The Company entered into an intercompany allocation agreement (the "Allocation Agreement") with Holdings on October 12, 2018. Under the terms of the Allocation Agreement, the Comp
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the 2017 Senior Credit Facility refers to the First Lien Term Loan and Second Lien Term Loan that Holdings entered into on April 25, 2017. The First Lien Credit Agreement consisted of a $192.5 million First Lien Term Loan maturing on April 25, 2024, and a $25.0 million Revolver maturing on April 25, 2022. The Second Lien Credit Agreement consisted of an $87.5 million Second Lien Term Loan maturing on April 25, 2025.
The proceeds from these Term Loans were used to fund the Merger. Checkers also entered into an intercompany allocation agreement with Holdings on October 12, 2018, which guaranteed payment and performance of obligations under the 2017 Senior Credit Facility.
This means that Checkers was obligated to cover the debts associated with the 2017 Senior Credit Facility, impacting its financial structure and obligations. Prospective franchisees should be aware of how Checkers manages its debt and how this might affect the financial stability and future growth of the company.