What was the estimated fair value of the Series 2018-1 Class A-2-II Notes for Hardees in 2024?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
| 20 | 24 | 20 | 023 | |
|---|---|---|---|---|
| _ | Carrying | Estimated | Carrying | Estimated |
| Amount | Fair Value | Amount | Fair Value | |
| Financial liabilities: | ||||
| Series 2018-1 Class A-2-II Notes $ | 329,928 | $ 315,044 | $ 332,363 | $ 319,515 |
| Series 2018-1 Class A-2-III Notes | 234,366 | 222,070 | 236,353 | 227,945 |
| Series 2020-1 Class A-2 Notes | 382,905 | 344,350 | 385,688 | 346,802 |
| Series 2021-1 Class A-2 Notes | 172,623 | 146,543 | 173,801 | 146,485 |
On June 20, 2018, we completed a company-wide refinancing transaction (the "Series 2018-1 Refinancing"). In connection with the Series 2018-1 Refinancing, Carl's Jr. Funding LLC and Hardee's Funding LLC (collectively, the "Co-Issuers"), our indirect wholly-owned subsidiaries, issued an aggregate principal amount of $1,000,000 Series 2018-1 Fixed Rate Senior Secured Notes, Class A-2, ("Series 2018-1 Class A-2 Notes") and $70,000 Series 2018-1 Class A-1 Variable Funding Senior Secured Notes ("Series 2018-1 Variable Funding Notes", and together with the Series 2018-1 Class A-2 Notes, the "Series 2018-1 Senior Notes"). The indenture governing the Series 2018-1 Senior Notes (the "Indenture") allows the Co-Issuers to issue additional series of notes in the future subject to certain conditions.
The Series 2018-1 Class A-2 Notes were issued in three tranches: (i) $400,000 of Series 2018-1 4.250% Fixed Rate Senior Secured Notes, Class A-2-I, with an anticipated repayment date of June 2022; (ii) $350,000 of Series 2018-1 4.959% Fixed Rate Senior Secured Notes, Class A-2-II, with an anticipated repayment date of June 2025; and (iii) $250,000 of Series 2018-1 5.710% Fixed Rate Senior Secured Notes, Class A-2-III, with an anticipated repayment date of June 2028.
In April 2024, the Co-Issuers completed a refinancing transaction (the "Series 2024-1 Refinancing") under which the Co-Issuers issued the Series 2024-1 Class A-2 Notes. A portion of the net proceeds from the sale of the Series 2024-1 Class A-2 Notes were used to repay in full the Co-Issuer's outstanding Series 2018-1 Class A-2-II Notes, including transaction costs. As a result of the refinancing, the Company recorded a loss on early extinguishment of debt of $1,283 during fiscal 2025, which was comprised of the write-off of the Series 2018-1 Class A-2-II Notes unamortized deferred financing costs. The loss is included in other income, net in the Consolidated Statements of Operations.
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the estimated fair value of the Series 2018-1 Class A-2-II Notes in 2024 was $315,044. These notes are part of Hardees's financial liabilities.
The Series 2018-1 Class A-2 Notes were issued in three tranches as part of a company-wide refinancing transaction completed on June 20, 2018. Specifically, the Series 2018-1 Class A-2-II Notes had an initial value of $350,000 with a fixed interest rate of 4.959% and an anticipated repayment date of June 2025.
It's important to note that in April 2024, Hardees completed another refinancing transaction called the "Series 2024-1 Refinancing," and a portion of the proceeds were used to repay the Series 2018-1 Class A-2-II Notes. As a result, Hardees recorded a loss on early extinguishment of debt of $1,283 during fiscal year 2025.