What is the '2017 Senior Credit Facility' referring to for Checkersrallys?
Checkersrallys 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. | e | 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. | 5 | 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. | 2: | 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 | ie. |
| 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
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the '2017 Senior Credit Facility' refers to a set of debt agreements entered into on April 25, 2017. These agreements included a first lien credit agreement and a second lien credit agreement with Jefferies Finance LLC. The first lien credit agreement comprised 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. These loans were used to fund a merger.
The 2017 Senior Credit Facility subjected Checkersrallys to several restrictive financial and nonfinancial covenants. These covenants placed restrictions on Checkersrallys's ability to incur debt, provide guarantees, grant liens, sell assets, prepay indebtedness, make loans, investments, and acquisitions, or change its line of business. It also included a total leverage ratio financial covenant measured quarterly.
In March 2023, Checkersrallys failed to make a required interest payment, resulting in a default under the Senior Credit Facility terms. This allowed lenders to declare all outstanding amounts immediately due. Checkersrallys and the lenders then entered a forbearance agreement, temporarily waiving interest and principal payments through June 20, 2023, to negotiate a restructuring. Ultimately, the company completed an out-of-court restructuring on June 16, 2023, which altered the debt structure and ownership of the company.