Glendale, California – Commercial Loans information today is on sale-leaseback financing. DineEquity will sell 36 restaurants in St. Louis and parts of Illinois for $26 million to Mid River Restaurants LLC. The Virginia sale-leaseback transaction will close before the fourth quarter ends and the Mid River deal in first quarter 2011.
The seller has finalized a $950 million senior secured credit facility with a Commercial Mortgage Lender. Terms for the Commercial loan are a $900 million senior secured term loan that matures in October 2017. The other commercial loan is a $50 million note. The commercial loans will be funded Oct. 19, allowing DineEquity to retire other debt and fund previously announced tender offers. The Company’s commercial loans will bear interest at an annual rate equal to a LIBOR based rate, subject to a floor of 150 basis points, plus a spread of 450 basis points. Today, this represents a 6.0% interest rate on the Company’s commercial mortgages.
In 2009, Apple Investors, led by Anand D. Patel, bought an Investment Property Portfolio. They bought an Applebee’s in Albuquerque from DineEquity. In their latest deal, the buyer is getting a foothold in the Roanoke-Lynchburg, Virginia market. Apple Investors currently owns 18 IHOP (International House of Pancakes) restaurants, three Stevi B’s restaurants and two hotels in Florida along with to its Applebee’s restaurants.
The Virginia Commercial Property transaction is expected to generate about $16 million of gross cash proceeds for the seller, including inventory. DineEquity is bracing for an approximate $4 million tax liability as a result of the deal, which will generate $12 million in after-tax proceeds. However this will reduce related sale-leaseback financing obligations for nine commercial properties by $15 million.
In the Minnesota hand-off, the seller will realize $25 million in after-tax proceeds and eliminate $11 million in sale-leaseback financing obligations associated with six Investment Properties. Mid River Restaurants is an affiliate of Southern River Restaurants LLC, co-founded by Frank Heath and David Paradise in 2000 to facilitate the purchase of 12 Applebee’s Neighborhood Bar & Grill restaurants in Louisiana. In addition to Applebee’s restaurants, Heath owns 26 Hardee’s restaurants in West Virginia, North Carolina and Kentucky while Paradise owns 10 Taco Bell restaurants in Louisiana and Mississippi and 12 IHOP restaurants in Ohio, Indiana and Kentucky.
Reports have it that DineEquity is planning to sell 63 Applebee’s restaurants in Minnesota and Wisconsin in the fourth quarter. Recently, Cole Credit Property has agreed to to buy 12 properties in $23.7 Million Sale-Leaseback Applebee’s transaction. DineEquity, Inc. is based in beautiful Glendale, California. DineEquity, Inc. through its subsidiaries, franchises and operates restaurants under the Applebee’s Neighborhood Grill & Bar and IHOP brands. DineEquity is arguably the largest full-service restaurant company in the world with nearly 3,500 restaurants combined.
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