RUBY TUESDAY, INC. (NYSE:RT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
| ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT |
New Credit Facility
On May 26, 2017, Ruby Tuesday, Inc. (the Company) entered into a
$20.0 million 364-day senior secured revolving credit agreement
(the New Credit Facility) with UBS AG, Stamford Branch, to
replace its previously-disclosed four-year revolving credit
agreement with Bank of America, N.A., as Administrative Agent;
Wells Fargo, National Association; and Regions Bank, as amended,
restated or otherwise modified up to and including January 31,
2017 (the Prior Credit Facility). The description of the Prior
Credit Facility set forth under Item 1.01 in the Companys Current
Report on Form 8-K/A dated January 31, 2017 is incorporated by
reference herein.
Among other things, the New Credit Facility replaces the Prior
Credit Facility, which was paid off in full on May 26, 2017. The
New Credit Facility is extended to the Company on substantially
the same terms as the Prior Credit Facility. The New Credit
Facility is secured substantially by mortgages over certain of
the Companys real estate assets, and substantially all of the
Companys personal property, including equity interests in certain
of its subsidiaries. The New Credit Facility increases the
flexibility of the Debt to EBITDAR ratio compared to the Prior
Credit Facility, from 4.65:1.00 to 5.00:1.00 and reduces the
permitted indebtedness under its senior notes (the Senior Notes)
from $350.0 million to $212.5 million. Although the total
commitment amount of $20.0 million under the New Credit Facility
has been reduced from $30.0 million under the Prior Credit
Facility, the $15.0 million sublimit for standby letters of
credit remains unchanged.
Under the terms of the New Credit Facility, interest rates
charged on borrowings can vary depending on the interest rate
option we choose to utilize. Our options for the rate are a Base
Rate or LIBOR plus, in either case, an applicable margin,
provided that the rate shall not be less than zero. The Base Rate
is defined as the highest of the issuing banks prime rate, the
Federal Funds rate plus 0.50%, or the Adjusted LIBO Rate(as
defined in the New Credit Facility) plus 1.0%. The applicable
margin for the LIBO-based option is a 4.00% and for the Base Rate
option is a 3.00%. We pay commitment fees quarterly of 0.50% on
the unused portion of the New Credit Facility.
The New Credit Facility is effective as of May 26, 2017. As of
May 26, 2017, the Company has no amounts drawn under the
revolving loan commitment under the Senior Credit Facility, and
has $10.9 million drawn under standby letters of credit under the
New Credit Facility.
Mortgage Loan Modification
On May 25, 2017, the Company entered into a loan modification
amendment (the FTN Mortgage Loan Modification) relating to
certain of itsmortgage loan obligations (the FTN Loan Documents)
with First Tennessee Bank, N.A., as lender (First Tennessee). The
Company previously entered into a waiver with First Tennessee on
January 31, 2017, to which First Tennessee granted the Company a
permanent waiver relating to the FTN Loan Documents Event of
Default relating to the Prior Credit Facility.
Under the FTN Mortgage Loan Modification, First Tennessee has
granted the Company a limited waiver of any default or events of
default under the FTN Loan Documents solely relating the Companys
execution and performance under the New Credit Facility,
including any incurrence of debt thereunder, and the guaranty and
security interest grants made under the New Credit Facility and
related security documentation.
As of May 26, 2017, the Company had $4.8 million in mortgage loan
obligations outstanding under the FTN Loan Documents.
The foregoing descriptions of the New Credit Facility and the FTN
Mortgage Loan Modification are summaries only, and are qualified
in their entirety by reference to the complete text of the New
Credit Facility and the FTN Mortgage Loan Modification.
| Item 2.03 |
CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN |
The information set forth under Item 1.01 above is incorporated
by reference into this Item 2.03.
About RUBY TUESDAY, INC. (NYSE:RT)
Ruby Tuesday, Inc. owns and operates Ruby Tuesday casual dining and Lime Fresh Mexican Grill (Lime Fresh) casual restaurants. The Company also franchises the Ruby Tuesday concept in selected domestic and international markets, and the Lime Fresh concept in selected domestic markets. Its segments include Ruby Tuesday concept and Lime Fresh concept. As of March 1, 2016, the Company operated 729 Ruby Tuesday restaurants in 44 states, 13 foreign countries, and Guam, and there were 16 Lime Fresh restaurants in two states. Of those restaurants, it owned and operated approximately 649 Ruby Tuesday restaurants and franchised over 80 Ruby Tuesday restaurants, which consisted of 28 domestic and 52 international restaurants. It also owned and operated over eight Lime Fresh restaurants and franchised eight Lime Fresh domestic restaurants. The Company’s corporate-owned and operated restaurants are concentrated primarily in the Southeast, Northeast, Mid-Atlantic and Midwest of the United States. RUBY TUESDAY, INC. (NYSE:RT) Recent Trading Information
RUBY TUESDAY, INC. (NYSE:RT) closed its last trading session down -0.05 at 2.13 with 275,224 shares trading hands.