Monday, July 17, 2023
FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 17 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns over 2,300 units worldwide. For more information on FAT Brands, please visit www.fatbrands.com.
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Debt Raise. In an 8-K filing from late last week, FAT Brands reported the sale of an aggregate principal amount of $105.8 million of notes issued by its special purpose, wholly-owned subsidiary, FB Resid Holdings I, LLC, comprised of $52.9 million of Series 2023-1 10.00% Fixed Rate Senior Secured Notes, Class A-1 and $52.9 million of Series 2023-1 10.00% Fixed Rate Senior Subordinated Secured Notes, Class A-2. An additional $22.1 million in Class A-1 Notes and $22.1 in Class A-2 Notes were issued to a direct subsidiary of the Company and will be held pending sale to third party investors.
Cost. For both the Class A-1 Notes and A-2 Notes, the 10.00% interest rate is comprised of a 6.00% per annum nondeferrable interest portion and a 4.00% per annum deferrable interest portion. According to management, of the $105.8 million, about $60 million was used to swap out existing bonds, lowering overall required payments.
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