Whataburger, the well-known fast-food chain from Texas, is making a big play in the financial world. The company, famous for its striking orange and white themed restaurants and large, juicy burgers, is now entering the leveraged loan market. They aim to raise a substantial amount of $340 million.
This move is focused on improving the company's financial standing by paying off some of its existing preferred equity, a type of investment in the company. With this step, Whataburger is committed to strong financial management and growth in the competitive fast-food industry.
Texas Burger Chain Whataburger Collaborates with Morgan Stanley for Financial Deal
Whataburger, a privately-owned fast-food giant, is teaming up with the renowned bank Morgan Stanley for a significant financial transaction. Sources close to the situation revealed that the Texas burger chain is working on an addition to its existing loan.
The preliminary terms of the deal suggest an interest rate margin ranging from 300 to 325 basis points above the Secured Overnight Financing Rate. This will depend on the company's leverage, and the loan is expected to be issued at a slightly reduced price of 99.03 cents on the dollar.
The deadline for financial commitments to this deal is set for Wednesday at 5 p.m., New York time. Whataburger and Morgan Stanley anticipate finalizing the allocation of these funds by Thursday. This move marks an essential step in Whataburger's financial strategy as it continues to expand and solidify its presence in the fast-food industry.
Moreover, San Antonio's Whataburger is joining a wave of companies rushing into the leveraged loan market early this year. Many of these businesses, including the popular burger chain, are seizing the opportunity to reduce their interest expenses. According to Bloomberg's estimates, there are approximately 45 deals currently available to general investors.
Whataburger's strategy involves using the funds from this venture to repurchase some of its preferred equity. This type of financing is a mix of equity and debt, usually costing more than conventional debt financing.
By taking this step, Whataburger aims to streamline its financial structure and reduce expenses, following a trend among various companies seeking economic efficiency in the new year.
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Whataburger Near Original Location Set for $112K Revamp
In South Texas, near where the first Whataburger opened, a branch of the iconic burger chain is gearing up for a significant makeover. The Texas Department of Licensing and Regulation (TDLR) has revealed plans for a $112,258 upgrade to this Whataburger location. It's important to note that these plans, like all TDLR filings, are subject to changes.
The renovation will start in February, with an impressively quick turnaround time of less than a month. The estimated kickoff date is February 17, 2024, with completion aiming for March 2, 2024.
The upgrade will focus on the 3,500-square-foot restaurant. The planned improvements include installing a new drink counter, a fresh coat of paint, and updating the tiles in the dining area and restrooms. Additionally, the ceiling tiles in the toilets and kitchen will be reoriented to align in one direction, enhancing the overall look and feel of the space.
Founded in 1950 by Harmon Dobson in Corpus Christi, Texas, Whataburger has expanded to over 900 locations in 14 states. The chain's growth was highlighted in 2019 when private equity firm BDT Capital Partners acquired a majority stake from the Dobson family, marking a significant milestone in the company's history.
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