DineEquity Inc. (DIN:US), the owner of the Applebee’s and IHOP restaurant chains, decreased the discount at which it’s selling a $472 million term loan, according to a person with knowledge of the transaction.
The loan will now be sold at par, compared with 99.875 cents on the dollar previously proposed, said the person, who asked not to be identified because the information is private. The decrease in the discount increases proceeds for the company and reduces the yield to investors.
The debt, maturing in 2017, will pay interest at 2.75 percentage points more than the London interbank offered rate with a 1 percent floor, according to data compiled by Bloomberg.
Lenders are being offered one-year soft-call protection of 101 cents, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first year, the data show.
The company is also seeking a $75 million revolving line of credit that will pay 2.75 percentage points more than Libor, Bloomberg data show.
Leverage, or debt to earnings before interest, taxes, depreciation and amortization, will be 2.2 times on a senior secured basis and 5.1 times total. The debt is rated Ba2 by Moody’s Investors Service and BB- by Standard & Poor’s.
Barclays Plc is arranging the transaction and commitments are by 5 p.m. today in New York, the person said.
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