Nathan's Famous, Inc.
New Coverage/Issuer Covenant Card: Nathan’s Famous
Mon 11/16/2020 14:58 PM
Relevant Items:
Nathan’s Famous Covenants Tear Sheet, Debt Documents Summaries
Nathan’s Famous Covenants Debt Documents
Nathan’s Famous Inc., trading on Nasdaq under NATH and headquartered in Jericho, N.Y., is a branded licensor, wholesaler and retailer primarily of hot dog products, including Nathan’s World Famous Beef Hot Dogs. Nathan’s products are sold in supermarkets, club stores, food-service locations and company-owned and franchised restaurants throughout the U.S. and 11 foreign territories. It also owns the Arthur Treacher’s seafood brand.
Nathan’s Famous is the sole issuer of a single series of secured notes that are guaranteed by substantially all of its wholly owned subsidiaries. As of Sept. 27, it did not have any bank debt. However, the senior secured notes contemplate and permit the incurrence of a limited amount of additional priority debt that primes the liens securing the notes.
The company’s fiscal year ends on the last Sunday in March of each calendar year. The last day of the most recently ended fiscal quarter was Sept. 27, and Nathan’s refers to it as its second quarter of fiscal year 2021.
The company’s capital structure as of Sept. 27 is as follows:
Liquidity - Liquidity as of Sept. 27 was $82 million, which was simply Nathan’s cash on hand, as there is no revolving credit facility.
Debt and liens - We estimate that Nathan’s can incur $11.3 million of debt secured by superpriority liens and $42.5 million of pari or unsecured debt. The priority debt can be under a credit facility or take the form of additional notes under another indenture.
Restricted payments and investments - The senior secured notes do not contain a leverage-based basket for restricted payments or investments, and Nathan’s must rely primarily on general baskets. Restricted payments are limited to approximately $20 million, and investments are limited to approximately $17.5 million, plus any availability under a build-up basket.
--Richard Barbour II
Nathan’s Famous Covenants Tear Sheet, Debt Documents Summaries
Nathan’s Famous Covenants Debt Documents
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Nathan’s Famous Inc., trading on Nasdaq under NATH and headquartered in Jericho, N.Y., is a branded licensor, wholesaler and retailer primarily of hot dog products, including Nathan’s World Famous Beef Hot Dogs. Nathan’s products are sold in supermarkets, club stores, food-service locations and company-owned and franchised restaurants throughout the U.S. and 11 foreign territories. It also owns the Arthur Treacher’s seafood brand.
Nathan’s Famous is the sole issuer of a single series of secured notes that are guaranteed by substantially all of its wholly owned subsidiaries. As of Sept. 27, it did not have any bank debt. However, the senior secured notes contemplate and permit the incurrence of a limited amount of additional priority debt that primes the liens securing the notes.
The company’s fiscal year ends on the last Sunday in March of each calendar year. The last day of the most recently ended fiscal quarter was Sept. 27, and Nathan’s refers to it as its second quarter of fiscal year 2021.
The company’s capital structure as of Sept. 27 is as follows:
Covenant Conclusions
Liquidity - Liquidity as of Sept. 27 was $82 million, which was simply Nathan’s cash on hand, as there is no revolving credit facility.
Debt and liens - We estimate that Nathan’s can incur $11.3 million of debt secured by superpriority liens and $42.5 million of pari or unsecured debt. The priority debt can be under a credit facility or take the form of additional notes under another indenture.
Restricted payments and investments - The senior secured notes do not contain a leverage-based basket for restricted payments or investments, and Nathan’s must rely primarily on general baskets. Restricted payments are limited to approximately $20 million, and investments are limited to approximately $17.5 million, plus any availability under a build-up basket.
--Richard Barbour II
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