What are the interest payment terms for the Class A-1 Notes related to Cinnabon?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
he "Senior Notes"). Each of the 2023-1 Class A-1 Notes and the 2022-1 Class A-1 Notes allow for the drawing of up to $200,000 on a revolving basis, for a combined total of up to $400,000.
Interest and principal payments on the Class A-2 Notes are due on a quarterly basis. The requirement to make such quarterly principal payments on the Class A-2 Notes is subject to certain financial conditions set forth in the indenture governing the Senior Notes (the "Indenture"). The legal final maturity dates of the Class A-2 Notes range from 2047 through 2054. If the Co-Issuers have not repaid or refinanced the Class A-2 Notes prior to their anticipated repayment dates, which range from 2027 through 2031, additional interest will accrue pursuant to the Indenture.
Advances under the Class A-1 Notes bear interest at a variable rate based on (i) the prime rate, (ii) the federal funds rate, (iii) the secured overnight financing rate, or (iv) with respect to advances made by conduit investors through the issuance of commercial paper, the commercial paper rate applicable to such conduit investor, plus, in each case, any applicable margin, as specified in the note purchase agreements. The Class A-1 Notes are subject to (i) certain commitme
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, the Class A-1 Notes have specific interest payment terms. Interest on these notes is variable and is based on several possible rates: the prime rate, the federal funds rate, the secured overnight financing rate, or the commercial paper rate applicable to conduit investors. The specific rate used depends on the note purchase agreements.
In addition to interest, the Class A-1 Notes are subject to commitment fees on any unutilized portion of the investors' commitments. There are also fees associated with any letters of credit issued under these notes. As of December 29, 2024, the outstanding letters of credit totaled $24,248, primarily related to interest reserves required under the Indenture.
Interest payments for the Class A-1 Notes are due on a quarterly basis. As of December 29, 2024, the company had $148,000 outstanding under the 2022-1 Class A-1 Notes and $138,000 outstanding under the 2023-1 Class A-1 Notes. These financial details are important for prospective franchisees to understand Cinnabon's financial structure and obligations.