Feb. 4 (Bloomberg) -- Dunkin’ Brands Group Inc., the owner of Dunkin’ Donuts and Baskin-Robbins restaurants, is seeking commitments from lenders today at noon in New York on $1.83 billion of loans to refinance debt, according to a person with knowledge of the deal.
A $1.38 billion term portion due in February 2021 and a $450 million term loan that will expire in September 2017 may pay interest at 2.5 percentage points more than the London interbank offered rate, said the person, who asked not to be identified without authorization to speak publicly. The debt is offered to lenders at 99.75 cents on the dollar.
“The company is seeking to favorably reprice the facility, extend maturities by one year and replenish its share repurchase authorization to $110 million,” Moody’s Investors Service analysts led by William Fahy wrote in a Jan. 24 report in which they said the transaction is “credit positive.”
Moody’s grades the company B2 with a “stable” outlook, while Standard & Poor’s rates Dunkin’ Brands one level higher, at B+.
JPMorgan Chase & Co. is arranging the financing, which offers lenders six months of call protection at 101 cents, meaning Canton, Massachusetts-based Dunkin’ Brands would have to pay a one-cent premium to reprice the debt in its first year.
Dunkin’ had been majority owned by investment funds affiliated with Bain Capital Partners LLC, Carlyle Group and Thomas H. Lee Partners LP since a 2006 leveraged buyout. The sponsors began selling out of their positions in 2012 and completely exited by Sept. 28, 2013, according to a Nov. 6 regulatory filing.
The transaction includes a $100 million revolving line of credit due in five years.
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