8-KMaterial AgreementsFinancial EventsExhibits & Filings

DARDEN RESTAURANTS INC 8-K Report, Material Agreement (Sep 24, 2007)

Filed September 24, 2007For Securities:DRI

Summary

Darden Restaurants, Inc. (DRI) has filed an 8-K report detailing the establishment of new credit facilities totaling $1.9 billion. On September 20, 2007, the company entered into a $750 million revolving credit agreement and a $1.15 billion 364-day interim credit agreement, both with Bank of America, N.A. as the administrative agent. These facilities replace a prior $500 million credit agreement and are structured to provide significant financial flexibility. The primary purpose of the $1.15 billion interim facility is to finance the previously announced acquisition of RARE Hospitality International, Inc. (RARE) and related expenses, as well as to repay existing debt and support commercial paper issuances. The $750 million revolving credit facility is more versatile, intended for commercial paper back-up, working capital, capital expenditures, refinancing debt, partially funding the RARE acquisition, and general corporate purposes. This revolving facility also includes a sublimit for letters of credit and the option to increase the commitments by up to $250 million.

Key Highlights

  • 1Darden Restaurants secured two new credit facilities totaling $1.9 billion: a $750 million revolving credit agreement and a $1.15 billion 364-day interim credit agreement.
  • 2The new credit facilities are senior unsecured debt obligations with Bank of America, N.A. as the administrative agent.
  • 3The $1.15 billion interim facility is specifically earmarked to finance the acquisition of RARE Hospitality International, Inc. (RARE).
  • 4The $750 million revolving credit facility offers broad use, including working capital, capital expenditures, and general corporate purposes, in addition to acquisition support.
  • 5The revolving credit facility has a maturity date of September 20, 2012, and can be increased by up to $250 million.
  • 6The interim facility matures in 364 days and can be converted into a revolving facility to support commercial paper.
  • 7The company terminated its prior $500 million credit agreement upon entering into these new facilities.

Frequently Asked Questions

Darden Restaurants has secured a total of $1.9 billion in new credit through two agreements: a $750 million revolving credit facility and a $1.15 billion 364-day interim credit facility.

The primary purpose of the $1.15 billion interim facility is to finance the acquisition of RARE Hospitality International, Inc. The $750 million revolving credit facility is more broadly intended for working capital, capital expenditures, refinancing debt, partial acquisition financing, and general corporate purposes.

Upon the execution of these new credit agreements on September 20, 2007, Darden Restaurants terminated its prior $500 million Credit Agreement dated August 16, 2005, and repaid all outstanding loans under it.

The $1.15 billion interim facility matures in 364 days from the closing date and can be converted into a revolving facility. The $750 million revolving credit facility matures on September 20, 2012. Both facilities are senior unsecured debt obligations and include various covenants and default events.