Carrols files to sell $475 million income securities, obtain new loan; to repay bank debt, 9½% notes

New York, June 22 - Carrols Holding Corp. plans to sell up to $475 million of income securities in the Enhanced Yield Securities structure, common stock and senior subordinated notes, according to an S-1 filing with the Securities and Exchange Commission.

Proceeds, along with borrowings under a new credit facility, will be used to repay the company's existing bank debt and its $170 million 9½% senior subordinated notes due 2008.

The EYS will be made up of shares of common stock and senior subordinated notes due 2016. After 45 days, holders can separate them into their components.

The senior subordinated notes to be sold separately will also mature in 2016.

Lehman Brothers is bookrunner for the sale.

Carrols Holding, a Syracuse, N.Y., operator of 534 restaurants, the world's largest Burger King franchisee and the parent of Carrols Corp., will also amend and restate its existing credit facility as a new loan with Lehman Brothers as lead arranger and bookrunner. The S-1 filing did not disclose the size of the new facility but did say it will include a revolver and a term loan.

Proceeds will be used it repurchase common stock from Carrols' existing shareholders and management, to repay all borrowings under the existing credit facility, to repurchase all Carrols' 9½% notes through a tender offer or a redemption, to pay bonuses and other payments to management and for fees and expenses.

The existing credit facility includes a $50 million revolving credit facility, a $70 million term loan A and an $80 million term loan B. As of March 31, 2004 there were no borrowings on the revolver, $37.1 million outstanding on the term loan A and $74.1 million on the term loan B.

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