Dine Brands Global Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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| Item 1.01. | Entry into a Material Definitive Agreement. |
On June 17, 2025 (the “Closing Date”), Applebee’s Funding LLC and IHOP Funding LLC (the “Co-Issuers”), each a special purpose, wholly-owned indirect subsidiary of Dine Brands Global, Inc., a Delaware corporation (the “Corporation”), issued the Series 2025-1 6.720% Fixed Rate Senior Secured Notes, Class A-2 (the “Class A-2 Notes”) in an initial aggregate principal amount of $600 million. The Class A-2 Notes were issued pursuant to an offering exempt from registration under the Securities Act of 1933, as amended.
The Co-Issuers also replaced their existing revolving financing facility, the 2022-1 Variable Funding Senior Notes, Class A-1 (“2022-1 Class A-1 Notes”), with a new revolving financing facility, the 2025-1 Variable Funding Senior Notes, Class A-1 (the “Class A-1 Notes”), on substantially the same terms as the 2022-1 Class A-1 Notes in order to conform the term of the Class A-1 Notes to the anticipated repayment dates for the Class A-2 Notes. The Class A-1 Notes and the Class A-2 Notes are referred to collectively herein as the “New Notes”.
The New Notes were issued in a securitization transaction pursuant to which substantially all of the domestic revenue-generating assets and domestic intellectual property, as further described below, held by the Co-Issuers and certain other special-purpose, wholly-owned indirect subsidiaries of the Corporation (the “Guarantors”) were pledged as collateral to secure the New Notes.
Class A-2 Notes
The New Notes were issued under a Second Amended and Restated Base Indenture, dated as of April 17, 2023, as amended by Supplemental Indenture No. 1 thereto, dated as of June 17, 2025 (the “Base Indenture”), a copy of which is attached hereto as Exhibit 4.1, and the related Series 2025-1 Supplement to the Base Indenture, dated June 17, 2025 (the “Series 2025-1 Supplement”), a copy of which is attached hereto as Exhibit 4.2, among the Co-Issuers and Citibank, N.A., as the trustee (in such capacity, the “Trustee”) and securities intermediary. The Base Indenture and the Series 2025-1 Supplement (collectively, the “Indenture”) will allow the Co-Issuers to issue additional series of notes in the future subject to certain conditions set forth therein.
While the Class A-2 Notes are outstanding, payment of principal and interest is required to be made on the Class A-2 Notes on a quarterly basis. The payment of principal on the Class A-2 Notes may be suspended when the leverage ratio for the Corporation and its subsidiaries is less than or equal to 5.25x.
The legal final maturity of the Class A-2 Notes is in June 2055, but it is anticipated that, unless earlier prepaid to the extent permitted under the Indenture, the Class A-2 Notes will be repaid in June 2030 (the “Class A-2 Anticipated Repayment Date”). If the Co-Issuers have not repaid or refinanced the Class A-2 Notes by the Class A-2 Anticipated Repayment Date, then additional interest will accrue on the Class A-2 Notes at the greater of: (A) 5.0% and (B) the amount, if any, by which the sum of the following exceeds the applicable Series 2025-1 Class A-2 Note interest rate: (x) the yield to maturity (adjusted to a quarterly bond-equivalent basis) on the applicable anticipated repayment date of the United States Treasury Security having a term closest to 10 years plus (y) 5.0%, plus (z) 2.85%.
Class A-1 Notes
The Co-Issuers also entered into a revolving financing facility, the Class A-1 Notes, that allows for drawings up to $325 million of variable funding notes and the issuance of letters of credit. The Class A-1 Notes were issued under the Indenture. Drawings and certain additional terms related to the Class A-1 Notes are governed by the Class A-1 Note Purchase Agreement, dated June 17, 2025, among the Co-Issuers, certain special-purpose, wholly-owned indirect subsidiaries of the Corporation, each as a Guarantor, the Corporation, as manager, certain conduit investors, financial institutions and funding agents, and Coöperatieve Rabobank U.A., New York Branch, as provider of letters credit, swingline lender and administrative agent (the “Purchase Agreement”), a copy of which is attached hereto as Exhibit 10.1.
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The Class A-1 Notes will be governed, in part, by the Purchase Agreement and by certain generally applicable terms contained in the Indenture. The applicable interest rate under the Variable Funding Note depends on the type of borrowing by the Co-Issuers. The applicable interest rate for advances is generally calculated at a per annum rate equal to the commercial paper funding rate or one-, two-, three- or six-month Term SOFR Rate, in either case, plus 2.50%. The applicable interest rate for swingline advances and unreimbursed draws on outstanding letters of credit is a per annum base rate equal to the sum of (a) the greatest of (A) the Prime Rate in effect from time to time, (B) the Federal Funds Rate in effect from time to time plus 0.50% and (C) Term SOFR for a one-month tenor in effect at such time plus 0.50% plus (b) 2.00%. It is anticipated that the principal and interest on the Class A-1 Notes will be repaid in full on or prior to the quarterly payment date in June 2030 (the “Class A-1 Anticipated Repayment Date”), subject to two additional one-year extensions at the option of the Corporation upon the satisfaction of certain conditions. Capitalized terms used above but not defined herein are defined in the Purchase Agreement.
Management Agreement
Under the terms of the Fourth Amended and Restated Management Agreement, dated September 30, 2014, as amended and restated as of September 5, 2018, as further amended and restated as of June 5, 2019, as further amended and restated as of April 17, 2023, and as further amended and restated as of June 17, 2025, a copy of which is attached hereto as Exhibit 10.3, among the Corporation, the Securitization Entities, Applebee’s Services, Inc., International House of Pancakes, LLC and the Trustee, the Corporation will act as the manager with respect to the Securitized Assets. The primary responsibilities of the manager will be to perform certain franchising, distribution, intellectual property and operational functions on behalf of the Securitization Entities with respect to the Securitized Assets pursuant to the Management Agreement. The manager will be entitled to the payment of the weekly management fee, as set forth in the Management Agreement and will be subject to the liabilities set forth in the Management Agreement.
The manager will manage and administer the Securitized Assets in accordance with the terms of the Management Agreement and, except as otherwise provided in the Management Agreement, the management standard set forth in the Management Agreement. Subject to limited exceptions set forth in the Management Agreement, the Management Agreement does not require the manager to expend or risk its funds or otherwise incur any financial liability in the performance of any of its rights or powers under the Management Agreement if the manager has reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not compensated by payment of the weekly management fee or is otherwise not reasonably assured or provided to it.
Subject to limited exceptions set forth in the Management Agreement, the manager will indemnify each Securitization Entity, the trustee and certain other parties, and their respective officers, directors, employees and agents for all claims, penalties, fines, forfeitures, losses, liabilities, obligations, damages, actions, suits and related costs and judgments and other costs, fees and reasonable expenses that any of them may incur as a result of (a) failure of the manager to perform or observe its obligations under the Management Agreement, (b) the breach by the manager of any representation, warranty or covenant under the Management Agreement, or (c) the manager’s negligence, bad faith, fraud or willful misconduct in the performance of its duties under the Management Agreement.
Covenants and Restrictions
The New Notes are subject to a series of covenants and restrictions customary for transactions of this type, including: (i) that the Co-Issuers maintain specified reserve accounts to be used to make required payments in respect of the New Notes, (ii) provisions relating to optional and mandatory prepayments, and the related payment of specified amounts, including specified call redemption premiums in the case of Class A-2 Notes under certain circumstances; (iii) certain indemnification payments in the event, among other things, the transfers of the assets pledged as collateral for the New Notes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters. The New Notes are subject to customary rapid amortization events provided for in the Indenture, including events tied to failure of the Securitization Entities to maintain the stated debt service coverage ratio, the sum of domestic retail sales for all restaurants being below certain levels on certain measurement dates, certain manager termination events,
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certain events of default and the failure to repay or refinance the Class A-2 Notes on the anticipated repayment dates. The New Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the New Notes, failure of the Securitization Entities to maintain the stated debt service coverage ratio, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties and certain judgments.
Use of Proceeds
On the Closing Date, the Corporation used a portion of the net proceeds of the offering to repay the entire outstanding balance of approximately $594 million of the Series 2019-1 4.723% Fixed Rate Senior Notes, Class A-2-II. The Corporation will also use the net proceeds of the offering to pay for transactions costs associated with the securitization refinancing transaction and for general corporate purposes.
The above descriptions of the Base Indenture, the Series 2025-1 Supplement, the Purchase Agreement, and the Management Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Base Indenture, the Series 2025-1 Supplement, the Purchase Agreement, and the Management Agreement filed as Exhibits 4.1, 4.2, 10.1, 10.3, respectively, hereto and, in each case, incorporated herein by reference.
| Item 1.02. | Termination of Material Definitive Agreement |
In connection with the transaction referenced in Item 1.01 of this Current Report on Form 8-K, the Corporation terminated the following:
| • | Series 2019-1 Supplement to Base Indenture, dated June 5, 2019, among Applebee’s Funding LLC and IHOP Funding LLC, each as Co-Issuer, and Citibank, N.A., as Trustee and Series 2019-1 Securities Intermediary (which was previously filed as Exhibit 4.2 to the Corporation’s Current Report on Form 8-K on June 5, 2019) |
| • | Series 2022-1 Supplement to Base Indenture, dated August 12, 2022, among Applebee’s Funding LLC and IHOP Funding LLC, each as Co-Issuer, and Citibank, N.A., as Trustee and Series 2022-1 Securities Intermediary (which was previously filed as Exhibit 4.2 to the Corporation’s Current Report on Form 8-K on August 12, 2022) |
| • | Class A-1 Note Purchase Agreement, dated August 12, 2022, among the Co-Issuers, certain special-purpose, wholly-owned indirect subsidiaries of the Corporation, each as a Guarantor, the Corporation, as manager, certain conduit investors, financial institutions and funding agents, and Coöperatieve Rabobank U.A., New York Branch, as provider of letters of credit, swingline lender and administrative agent (which was previously filed as Exhibit 10.1 to the Corporation’s Current Report on Form 8-K on August 12, 2022) |
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
| Item 7.01. | Regulation FD Disclosure |
On June 17, 2025, the Corporation issued a press release announcing the completion of its securitization refinancing transaction. A copy of the press release is attached hereto as Exhibit 99.1, and is incorporated herein by reference.
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| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: June 17, 2025
| DINE BRANDS GLOBAL, INC. | ||
| By: | /s/ Vance Y. Chang | |
| Name: | Vance Y. Chang | |
| Title: | Chief Financial Officer | |
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