Four Corners Property Trust (FCPT) has entered into a $750 million credit agreement — consisting of a five-year term loan facility of $400 million and a four-year revolving credit facility of $350 million — with a consortium of banks in connection with its spin-off from Darden Restaurants, Inc.
An accordion feature built into the agreement could increase the facility, led by JP Morgan, to $1 billion in aggregate if one or more new or existing lenders agree to provide additional commitments.
The spin-off allows Four Corners to proceed with its plans to elect and qualify as a real estate investment trust (REIT), effective January 1, 2016, and the now public company’s shares will begin trading on on the New York Stock Exchange under the symbol “FCPT” on November 10.
“Our existing diversified portfolio consists of well-located assets in 44 states that have demonstrated strong operating performance. Looking ahead, we have a long-term opportunity to grow shareholder value through expanding and further diversifying the portfolio while maintaining a conservative and flexible balance sheet.”
Meanwhile, Darden received cash proceeds from FCPT of $315 million, which it anticipates using along with cash on hand to retire approximately $1 billion in debt “in the near future while maintaining its investment grade credit profile,” according to a statement from the restaurant group.
With the close of the transaction, FCPT now owns the real estate associated with 424 restaurants, 418 of which will be leased back to Darden subsidiaries through triple-net leases with on average 15-year initial terms.
The portfolio includes 300 Olive Garden restaurants, 104 LongHorn Steakhouse restaurants, 11 Bahama Breeze restaurants, two Seasons 52 restaurants, and one Wildfish Seafood Grille restaurant. The remaining restaurants — six LongHorn Steakhouse restaurants in San Antonio, Texas — will be operated by a subsidiary of Four Corners under a franchise agreement with Darden.