WEN » Topics » Pro Forma Adjustments for the Debt Refinancing
This excerpt taken from the WEN 8-K filed Aug 26, 2005.
Pro Forma Adjustments for the Debt Refinancing
(m) To adjust “Interest expense” as follows (in thousands):
Record interest expense at an assumed interest rate of 5.73% on the assumed term loan borrowings initially of $620,000 under the new credit facility(1)
Record amortization expense under the interest rate method on the estimated $13,000 of deferred financing costs associated with the new credit facility
Record amortization credit under the interest rate method on the fair value adjustment of RTM's sale-leaseback and capital lease obligations not refinanced
Reverse reported interest expense and on the debt refinanced
Reverse reported amortization of deferred financing costs and original issue discount associated with the debt refinanced
Record a commitment fee of 0.5% on the $100,000 of availability under the revolving credit component of the new credit facility
The assumed interest rate represents the rate in effect as of July 28, 2005 based on the 30-day London Interbank Offered Rate (3.48% set as of July 26, 2005) plus 2.25% charged on the average outstanding borrowings under the term loans. The average outstanding borrowings reflect scheduled repayments under the term loans assuming the initial borrowings occurred at the beginning of the fiscal year ended January 2, 2005 and were $6,200 for the year ended January 2, 2005 and $3,100 for the six months ended July 3, 2005.
If the assumed interest rate on the term loan borrowings under the new credit facility changes by 0.125%, the pro forma interest expense would change by $772 for the year ended January 2, 2005 and $383 for the six months ended July 3, 2005.
To reverse “Insurance expense related to long-term debt” as a result of the repayment of the Company's securitization notes to which the insurance related.
To reflect the estimated income tax effect of entries (m) and (n) above at the incremental tax rate of 40.0%.
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