What is the maturity date for the Last-Out Term Loans for Checkers, and what interest rate do they bear?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the Last-Out Term Loans mature on June 16, 2028. These loans bear interest at a floating rate, which, at Checkers's option, can be either an alternative base rate plus 8.00% per annum or the Adjusted Term Secured Overnight Financing Rate plus 9.00% per annum, along with a credit adjustment spread.
Checkers also has the option to pay interest on these loans in kind, meaning they can pay with additional debt, at a rate of 6.00% per annum instead of cash. This could be beneficial for cash flow management, but it would increase the overall debt burden.
Additionally, Checkers is required to make recurring quarterly principal payments on the Last-Out Term Loans, equivalent to 0.25% of the original principal amount. The remaining principal amount is due upon maturity. Upon each principal repayment, Checkers is required to pay a contractual premium, with the premium percentage decreasing over time: 8% on or after the first anniversary, but prior to the second anniversary; 7% on or after the second anniversary, but prior to the third anniversary; 5% on or after the third anniversary; and 3% on or after the fourth anniversary.