Bloomberg News

Caribbean Restaurants Sets Rate on $190 Million Term Loan

January 26, 2012

(Updates with call protection in fourth paragraph.)

Jan. 25 (Bloomberg) -- Caribbean Restaurants Inc., the franchisee of Burger King restaurants in Puerto Rico, set the interest rate it will pay on a $190 million term loan it’s seeking to refinance debt, according to a person with knowledge of the transaction.

The five-year debt will pay 8 percentage points more than the London interbank offered rate, said the person, who declined to be identified because the terms are private. Libor, the rate banks say they can borrow in dollars from each other, will have a 1.5 percent floor.

Caribbean Restaurants is proposing to sell the loan at 97 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.

Lenders are being offered soft-call protection of 102 cents and 101 cents, said the person. That means the company would have to pay 2 cents more than face value to refinance the debt during the first year and 1 cent during the second year.

The Puerto Rico-based company is also seeking a $20 million revolving line of credit maturing in 4.5 years, according to data compiled by Bloomberg.

Jefferies Group Inc. is arranging the financing and lenders must submit commitments by Feb. 8, the person said.

Castle Harlan Inc. acquired the company from Oak Hill Capital Partners LP and American Securities Capital Partners for $340 million in July 2004, according to a Castle Harlan statement.

Michael Millican, a spokesman for Castle Harlan, declined to comment.

In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.

--Editors: Faris Khan, Chapin Wright

To contact the reporter on this story: Michael Amato in New York at mamato3@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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