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Sonic Completes Issuance of Securitized Notes

OKLAHOMA CITY, May 17, 2016 (BUSINESS WIRE) -- Sonic Corp. SONC, -0.61% the nation's largest chain of drive-in restaurants, today announced that certain of its subsidiaries have issued $425 million of Series 2016-1 Class A-2 Fixed Rate Senior Secured Notes (the "2016 Fixed Rate Notes") in a private securitization transaction. The 2016 Fixed Rate Notes will have an expected life of seven years and bear interest at 4.47% per annum, payable monthly. Guggenheim Securities, LLC acted as sole structuring advisor and active book-running manager for the transaction.

The same Sonic subsidiaries have also entered into a $150 million securitized revolving credit facility of Series 2016-1 Class A-1 Variable Funding Senior Secured Notes (the “2016 Variable Funding Notes” and, together with the 2016 Fixed Rate Notes, the "2016 Notes"). The Company does not currently have any borrowings under the 2016 Variable Funding Notes facility.

The net proceeds from the sale of the 2016 Fixed Rate Notes will be used to repay the approximately $266 million in outstanding Series 2011-1 Class A-2 Fixed Rate Senior Secured Notes and the $67 million in outstanding Series 2011-1 Class A-1 Variable Funding Senior Secured Notes, together with related prepayment premium and transaction costs. The remaining net proceeds will be available for further investment in the business and to return to shareholders via share repurchase or dividends. Including the impact of the transaction, net interest expense is projected to be $26 to $27 million for fiscal year 2016.

The subsidiaries that will issue the 2016 Notes are indirect subsidiaries of Sonic Corp. that own substantially all of the Sonic system's franchising assets and real estate. The...


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