How much did Del Taco capitalize in connection with the 2022 Notes?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
as comprised of the write-off of certain deferred financing costs and a specified make-whole premium payment, and is presented in "Interest expense, net" in the consolidated statement of operations. Additionally, in connection with the 2022 N
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to the 2025 FDD, Del Taco capitalized $17.4 million of debt issuance costs in connection with the 2022 Notes. These costs are being amortized into interest expense over the Anticipated Repayment Dates, utilizing the effective interest rate method.
For a prospective Del Taco franchisee, this information provides insight into the financial strategies employed by the company. Capitalizing debt issuance costs and amortizing them over the repayment period is a common accounting practice that spreads the expense over the life of the debt, rather than recognizing it all at once.
Understanding these financial details can help a franchisee assess the overall financial health and stability of Del Taco. It's important to note that these capitalized costs are non-cash expenses, meaning they don't represent an immediate outflow of cash but rather an allocation of costs over time. Reviewing these figures in the context of Del Taco's broader financial statements can offer a more comprehensive understanding of the company's financial management practices.