ONE Group closes $390 million credit facilities for Safflower buy

By Marisa Wong

Los Angeles, May 1 – ONE Group Hospitality, Inc., wholly owned subsidiary ONE Group, LLC and some other operating subsidiaries entered into a credit agreement on May 1 with Deutsche Bank AG New York Branch, HPS Investment Partners, LLC, HG Vora Capital Management, LLC and some of their respective affiliates and subsidiaries for a $350 million senior secured term loan facility and a $40 million senior secured revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

On the closing date, the company borrowed $350 million under the term loan, and the revolver was undrawn.

Up to $10 million of the revolver will be available in the form of letters of credit.

The term loan will bear interest at SOFR plus 650 basis points. The five-year term loan is payable in quarterly installments beginning with the fiscal quarter ending Sept. 30 of 1% per annum for the first year (through June 30, 2025), then 2.5% per annum for the next two years (through June 30, 2027), then 5% per annum through maturity on April 30, 2029.

The revolver will bear interest at SOFR plus a margin based on the company’s consolidated net leverage ratio for the preceding four fiscal quarter period and will range from 550 bps to 600 bps. The revolver will mature on the date that is 44 months after the date of the related loan agreement.

The term loan will not be subject to a financial covenant, and the revolver’s financial covenant will apply only after 35% of its capacity has been drawn.

Deutsche Bank Securities Inc. and HPS Investment Partners, LLC acted as lead arrangers.

As previously announced, the term loan was earmarked for financing ONE Group’s acquisition of Safflower Holdings Corp. ONE Group announced on Wednesday that it completed its acquisition of Benihana’s owner for $365 million in cash.

Proceeds of the term loan will also be used to refinance the company’s existing credit agreement with Goldman Sachs Specialty Lending Group, LP and Goldman Sachs Bank USA and to pay fees and expenses in connection with the acquisition, the refinancing, the issuance and sale of preferred stock and incurrence of the new credit facilities.

ONE Group is a Denver-based restaurant company.

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