UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 16, 2021 (
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On June 15, 2021, The Wendy’s Company (the “Company”) and certain of its direct and indirect wholly owned subsidiaries, Wendy’s International, LLC, an Ohio limited liability company (“Wendy’s International”), Wendy’s Funding, LLC, a Delaware limited liability company (the “Master Issuer”), Wendy’s SPV Guarantor, LLC, a Delaware limited liability company (“Wendy’s SPV Guarantor”), Quality Is Our Recipe, LLC, a Delaware limited liability company (“Quality”), and Wendy’s Properties, LLC, a Delaware limited liability company (“Wendy’s Properties” and, together with the Company, Wendy’s International, the Master Issuer, Wendy’s SPV Guarantor and Quality, the “Wendy’s Parties”), entered into a Purchase Agreement (the “Purchase Agreement”) with certain initial purchasers named therein (the “Initial Purchasers”), pursuant to which, among other things, the Master Issuer, a special purpose subsidiary of the Company, has agreed to issue and sell $450 million of its Series 2021-1 2.370% Fixed Rate Senior Secured Notes, Class A-2-I (the “Class A-2-I Notes”) and $650 million of its Series 2021-1 2.775% Fixed Rate Senior Secured Notes, Class A-2-II (the “Class A-2-II Notes” and, together with the Class A-2-I Notes, the “2021 Notes”), in a privately placed securitization transaction under a new supplement to the base indenture dated as of June 1, 2015 by and between the Master Issuer and Citibank, N.A. as trustee and securities intermediary.
Interest payments on the 2021 Notes are payable on a quarterly basis. The anticipated repayment dates of the Class A-2-I Notes and the Class A-2-II Notes will be March 2029 and June 2031, respectively, unless earlier prepaid to the extent permitted under the indenture that will govern the 2021 Notes. If the Master Issuer has not repaid or redeemed the 2021 Notes prior to the respective anticipated repayment dates, additional interest will accrue on the 2021 Notes equal to the greater of (A) 5.00% per annum and (B) a per annum interest rate equal to the amount, if any, by which the sum of (i) the yield to maturity (adjusted to a quarterly bond-equivalent basis) on such anticipated repayment date of the United States Treasury Security having a term closest to ten (10) years, plus (ii) 5.00%, plus (iii)(1) with respect to the Series 2021-1 Class A-2-I Notes, 1.15%, and (2) with respect to the Series 2021-1 Class A-2-II Notes, 1.35%, exceeds the original interest rate with respect to such tranche.
The Purchase Agreement includes customary representations, warranties and covenants by the Wendy’s Parties. It also provides that the Wendy’s Parties will indemnify the Initial Purchasers against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). The closing of the sale of the 2021 Notes is anticipated to occur by the end of the second quarter of 2021 and is subject to the satisfaction of various closing conditions specified in the Purchase Agreement.
Certain of the Initial Purchasers and their respective affiliates have, from time to time, performed and may in the future perform various investment banking services for the Company for which they received or will receive customary fees and expenses.
The foregoing description of the Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by, reference to the Purchase Agreement, a copy of which is attached hereto as Exhibit 10.1.
The 2021 Notes have not been and will not be registered under the Securities Act and may not be offered or sold in the United States absent such registration or an exemption from the registration requirements of the Securities Act. This report shall not constitute an offer to sell or a solicitation of an offer to buy the 2021 Notes or any other security and shall not constitute an offer, solicitation or sale of the 2021 Notes or any other security in any jurisdiction where such an offering or sale would be unlawful. This report contains information about pending transactions and anticipated timing for the closing of such transactions, and there can be no assurance regarding the timing of the closing or that these transactions will be completed.
| Item 8.01 | Other Events. |
The Company has issued a notice of prepayment pursuant to the indenture governing its Series 2015-1 4.497% Fixed Rate Senior Secured Notes, Class A-2-III (the “2015 Class A-2-III Notes”) and its Series 2018-1 3.573% Fixed Rate Senior Secured Notes, Class A-2-I (the “2018 Class A-2-I Notes”) to prepay, subject to completion of the sale of the 2021 Notes as described in Item 1.01 above, all of the outstanding 2015 Class A-2-III Notes and the 2018 Class A-2-I Notes on the closing date of the sale of the 2021 Notes.
The Master Issuer also intends to enter into a new variable funding senior secured note facility, which will allow for the drawing of up to $300 million Series 2021-1 Class A-1 Notes (the “Class A-1 Notes”) using various credit instruments, including a letter of credit facility, from time to time on a revolving basis. The Class A-1 Notes will replace the Company’s existing $150 million Series 2019-1 Variable Funding Senior Secured Notes, Class A-1 and $100 million Series 2020-1 Variable Funding Senior Secured Notes, Class A-1.
Forward-Looking Statements
This Current Report on Form 8-K contains certain statements that are not historical facts, including statements regarding the planned refinancing transactions, including the size and timing of, and expected use of proceeds from, the offering. Those statements, as well as statements preceded by, followed by, or that include the words “plan,” “will,” “intend” or “expected” constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). The forward-looking statements are based on the Company’s expectations at the time, speak only as of the dates they are made and are susceptible to a number of risks, uncertainties and other factors. These factors include, but are not limited to, (1) the satisfaction of the closing conditions to the Purchase Agreement, (2) the impact of general market, industry, credit and economic conditions and the Company’s ability to complete the financing transaction on the terms described or at all; (3) disruption to the Company’s business from the novel coronavirus (COVID-19) pandemic and the impact of the pandemic on the Company’s results of operations, financial condition and prospects; (4) the impact of competition or poor customer experiences at Wendy’s restaurants; (5) economic disruptions, including in regions with a high concentration of Wendy’s restaurants; (6) changes in discretionary consumer spending and consumer tastes and preferences; (7) impacts to the Company’s corporate reputation or the value and perception of the Company’s brand; (8) the effectiveness of the Company’s marketing and advertising programs and new product development; (9) the Company’s ability to manage the accelerated impact of social media; (10) the Company’s ability to protect its intellectual property; (11) food safety events or health concerns involving the Company’s products; (12) the Company’s ability to achieve its growth strategy through new restaurant development and its Image Activation program; (13) the Company’s ability to effectively manage the acquisition and disposition of restaurants or successfully implement other strategic initiatives; (14) risks associated with leasing and owning significant amounts of real estate, including environmental matters; (15) the Company’s ability to achieve and maintain market share in the breakfast daypart; (16) risks associated with the Company’s international operations, including the ability to execute its international growth strategy; (17) changes in commodity and other operating costs; (18) shortages or interruptions in the supply or distribution of the Company’s products and other risks associated with the Company’s independent supply chain purchasing co-op; (19) the impact of increased labor costs or labor shortages; (20) the continued succession and retention of key personnel and the effectiveness of the Company’s leadership structure; (21) risks associated with the Company’s digital commerce strategy, platforms and technologies, including its ability to adapt to changes in industry trends and consumer preferences; (22) the Company’s dependence on computer systems and information technology, including risks associated with the failure, misuse, interruption or breach of its systems or technology or other cyber incidents or deficiencies; (23) risks associated with the Company’s securitized financing facility and other debt agreements, including compliance with operational and financial covenants, restrictions on its ability to raise additional capital, the impact of its overall debt levels and the Company’s ability to generate sufficient cash flow to meet its debt service obligations and operate its business; (24) risks associated with the Company’s capital allocation policy, including the amount and timing of equity and debt repurchases and dividend payments; (25) risks associated with complaints and litigation, compliance with legal and regulatory requirements and an increased focus on environmental, social and governance issues; (26) risks associated with the availability and cost of insurance, changes in accounting standards, the recognition of impairment or other charges, the impact of realignment and reorganization initiatives, changes in tax rates or tax laws and fluctuations in foreign currency exchange rates; (27) conditions beyond the Company’s control, such as adverse weather conditions, natural disasters, hostilities, social unrest, health epidemics or pandemics or other catastrophic events; and (28) other risks and uncertainties cited in the Company’s releases, public statements and/or filings with the Securities and Exchange Commission, including those identified in the “Special Note Regarding Forward-Looking Statements and Projections” and “Risk Factors” sections of the Company’s Forms 10-K and 10-Q. For all forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
The following exhibits are being filed with this Current Report on Form 8-K.
| Exhibit No. |
Description | |
| 10.1 | 2021-1 Class A-2 Note Purchase Agreement, dated as of June 15, 2021, by and among The Wendy’s Company, the subsidiaries of The Wendy’s Company party thereto and Guggenheim Securities, LLC and Jefferies LLC, each acting on behalf of itself and as the representatives of the initial purchasers. | |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| THE WENDY’S COMPANY | ||
| By: | /s/ Michael G. Berner | |
| Name: | Michael G. Berner | |
| Title: | Vice President – Corporate & Securities Counsel and Chief Compliance Officer and Assistant Secretary | |
Dated: June 16, 2021