Item 1.01 Entry into a Material Definitive Agreement.
On
Borrowings under the 2022 Credit Agreement (other than any swingline loans) bear interest, at the Borrower's option, at rates based upon either Term SOFR (as defined in the 2022 Credit Agreement) or a base rate, in each case plus a margin determined in accordance with a lease-adjusted consolidated leverage ratio-based pricing grid. The base rate is calculated as the highest of (a) the federal funds rate plus 0.50%, (b) Bank of America's published prime rate, or (c) Term SOFR with a term of one-month plus 1.00%. Swingline loans under the 2022 Credit Agreement bear interest at the base rate. For base rate loans, the applicable margin may range from 0.25% to 1.25%, and for Term SOFR loans, the applicable margin may range from 1.25% to 2.25%. Borrowings under the 2022 Revolver may be repaid and subsequently reborrowed. The Company is also obligated to pay other customary facility fees for a credit facility for this size and type.
The 2022 Credit Agreement includes customary negative covenants and financial covenants, including, among others, the following (all subject to certain exceptions): a maximum lease-adjusted consolidated leverage ratio, a minimum consolidated fixed charge coverage ratio covenant and limitations on (among others) indebtedness, liens, investments, asset sales, mergers, consolidations, liquidations, dispositions, restricted payments, negative pledges, transactions with affiliates, sale-leaseback transactions and certain prepayments of debt. The 2022 Credit Agreement also includes certain affirmative covenants and events of default.
Substantially simultaneously with entry into the 2022 Credit Agreement, the
Company used proceeds of borrowings under the 2022 Revolver to repay all amounts
outstanding under, and terminate, that certain Credit Agreement, dated as of
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth above under Item 1.01 is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description 10.1 Credit Agreement, dated as ofJuly 27, 2022 , amongEl Pollo Loco, Inc. , as borrower,El Pollo Loco Holdings, Inc. , as guarantor, the other guarantors party thereto, the lenders party thereto and Bank of America, as administrative agent, swingline lender and letter of credit issuer 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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