What is the interest rate that accrues on the 2021 VFN Notes for Nothing Bundt Cakes?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
ntered into a series supplement to the Indenture whereby it issued a series of senior term notes, the Series 2021-1 Fixed Rate Secured Notes (the "2021 Notes"), in an aggregate principal amount of $335.0 million.
The 2021 Notes were issued in two tranches, the $280.0 million Series 2021-1 2.989% Fixed Rate Class A-2 Senior Secured Notes and the $55.0 million Series 2021-1 4.970% Fixed Rate Class B Senior Subordinated Secured Notes. Both tranches have an "Anticipated Repayment Date" of July 2026 and a final maturity date of July 2051.
In addition to the 2021 Notes, the Indenture and series s
Source: Item 23 — RECEIPTS (FDD pages 93–309)
What This Means (2025 FDD)
According to Nothing Bundt Cakes' 2025 Franchise Disclosure Document, the Series 2021-1 Variable Funding Senior Secured Notes, Class A-1 ("2021 VFN Notes") accrue interest at a variable rate. This variable rate is calculated as the base rate (Term SOFR) plus 2.5%.
In simpler terms, the interest rate on these notes isn't fixed. It fluctuates based on the Term SOFR, which is a benchmark interest rate, plus an additional 2.5%. This means the cost of borrowing under these notes can change over time, depending on market conditions and the prevailing Term SOFR rate.
Prospective Nothing Bundt Cakes franchisees should be aware that these notes are part of a larger debt structure used by the company. Changes to these rates could impact the financial health of the franchisor, which could indirectly affect franchisees. It's essential to understand how the franchisor's financial obligations could influence their support and services to franchisees.