Bob Evans Farms amends credit facility, decreases it to $650 million

By Angela McDaniels

Tacoma, Wash., Oct. 21 – Bob Evans Farms, Inc. amended its existing credit facility to decrease its size to $650 million from $750 million, according to a company news release.

The decrease will lower the company’s unused facility fee costs and result in a $0.02 per diluted share charge to write off deferred financing costs.

Among other changes, the credit agreement was also amended to:

• Increase the level of permitted debt in connection with sale and leaseback transactions of assets to $300 million from $100 million;

• Remove the $150 million share repurchase cap during the 2016 fiscal year, although share repurchases remain subject to a leverage ratio restriction; and

• Change the definitions of consolidated EBITDA and leverage ratio (based on EBITDAR and lease debt calculated at 600% of lease expense).

The $300 million accordion feature remains in place.

The amendment enables the company “to effectively and efficiently lengthen the tenor of its capital structure by introducing long-term leases for a portion of our asset base. This completes an important step as we move forward with plans to monetize approximately $200 million of restaurant properties through a sale-leaseback transaction(s),” chief administrative officer and chief financial officer Mark Hood said in a company news release.

“Along with monetization of two of the company’s industrial properties and its headquarters, the amended facility provides Bob Evans with the flexibility to continue returning capital to shareholders while managing leverage prudently as we continue our restructuring and turnaround activities and positioning the company for sustainable profitable growth.”

PNC Bank, NA acted as administrative agent. PNC Capital Markets LLC acted as bookrunner and joint lead arranger. J.P. Morgan Securities LLC, BofA Merrill Lynch and Wells Fargo Bank, NA acted as joint lead arrangers. Co-syndicated agents included Bank of America NA, JPMorgan Chase Bank, NA, and Wells Fargo Bank. The other lenders are KeyBank, NA, Bank of America, Fifth Third Bank, U.S. Bank NA, Huntington National Bank, and Ohio Valley Bank Co.

Bob Evans Farms owns and operates full-service restaurants and produces refrigerated and frozen convenience food items. The company is based in New Albany, Ohio.

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