Denny's Establishes New $250M Credit Facility and Increases Share Repurchase Authorization By $100M

Denny's Corporation

, franchisor and operator of one of America's largest franchised full-service restaurant chains, today announced that it has entered into a new five-year $250 million revolving credit facility. The new credit facility replaces a term loan of $54.75 million and a $190 million revolving line of credit. Borrowings under the credit facility will bear a tiered interest rate, which is based on the Company's consolidated leverage ratio and is initially set at LIBOR plus 150 basis points. The new facility reduces the Company's credit spread by 25 basis points, at the current consolidated leverage ratio. In addition, the Company will have enhanced financial flexibility specifically towards returning capital to shareholders. At the time of closing, there were $135 million of borrowings under the new revolving line of credit, in addition to letters of credit issued in the normal course of business. Additionally, the Company's Board of Directors approved a new multi-year share repurchase program authorizing the repurchase of an additional $100 million of its common stock, in addition to repurchases previously authorized. Under this authorization, the Company may purchase its Common Stock from time to time in the open market or in privately negotiated transactions. The amount and timing of any purchases will depend upon a number of factors, including the price and availability of the Company's shares, trading volume and general market conditions. Mark Wolfinger, Executive Vice President, Chief Administrative Officer and Chief Financial Officer, stated, "Our new credit facility allows us to extend the maturities of our facility and lower the credit spreads. Most importantly, it provides increased flexibility for the Company to continue to return capital to shareholders, while also enhancing our ability to make appropriate investments in the brand. This transaction is a reflection of the progress we have made in our brand revitalization strategy, and demonstrates the confidence of the financial community in our strategic plan." Wells Fargo Securities, LLC, Regions Capital Markets, a division of Regions Bank, and Citizens Bank, N.A. served as the Joint Lead Arrangers and Joint Bookrunners for the new credit facility with Wells Fargo Bank, N. A., serving as Administrative Agent and L/C Issuer, and Cadence Bank, and Fifth Third Bank serving as Co-Documentation Agents. The Company, as of March 31, 2015, has repurchased a total of 21.6 million shares since initiating its share repurchase program and has 3.4 million shares remaining to be purchased under its current ten million share stock repurchase program announced in April 2013. As of March 24, 2015, the Company had 84,773,692 shares of common stock outstanding.