UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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Item 1.01.  Entry into a Material Definitive Agreement

On October 9, 2018, Papa John’s International, Inc. (the “Company”), entered into Amendment No. 3 to Credit Agreement (the “Amendment”) which amends its existing Credit Agreement, dated as of August 30, 2017 (as previously amended, the “Existing Credit Agreement” and the Existing Credit Agreement as amended by the Amendment, the “Amended Credit Agreement”) with certain direct and indirect subsidiaries of the Company as guarantors (the “Guarantors”), JPMorgan Chase Bank, N.A., as administrative agent, and the lenders (the “Lenders”) and other agents party thereto.  The Existing Credit Agreement provided for an unsecured revolving credit facility in an aggregate available principal amount of $600.0 million (the “Revolving Facility”) and an unsecured term loan facility in an aggregate original principal amount of $400.0 million (the “Term Loan Facility” and together with the Revolving Facility, the “Facilities”). As of October 8, 2018, the outstanding principal balance under the Facilities was $585.0 million, consisting of $380.0 million outstanding under the Term Loan Facility and $205 million under the Revolving Facility.

The Amendment, among other things, (i) reduces the maximum amount available under the Revolving Facility to $400.0 million, (ii) increases the interest rate payable on outstanding loans in respect of the Facilities by an additional per annum rate of (x) 0.25% if the leverage ratio of the Company on a consolidated basis (the “Leverage Ratio”) is greater than or equal to 3.50 to 1.00 but less than 4.50 to l.00 or (y) 0.50% if the Leverage Ratio is greater than or equal to 4.50 to 1.00, (iii) increases the fee payable in respect of the unused portion of the Revolving Facility by an additional per annum rate of (x) 0.05% if the Leverage Ratio is greater than or equal to 3.50 to 1.00 but less than 4.50 to l.00 or (y) 0.10% if the Leverage Ratio is greater than or equal to 4.50 to 1.00, (iv) modifies the financial covenants in the Existing Credit Agreement by increasing the Leverage Ratio levels required to be maintained on a quarterly basis and decreasing the EBITDA plus consolidated rental expense to consolidated interest expense plus consolidated rental expense ratio levels required to be maintained on a quarterly basis, (v) requires that the Company and the Guarantors grant a security interest in substantially all of the capital stock and equity interests of their respective domestic and first tier material foreign subsidiaries to secure the obligations owing under the Facilities, and (vi) modifies certain representations, covenants, and other provisions as provided for in the Amendment.  In connection with the Amendment, the Company paid customary fees to JPMorgan Chase Bank, N.A. and the Lenders consenting to the Amendment.

 

The foregoing description is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

From time to time, the Company has had customary commercial and/or investment banking relationships with JPMorgan Chase Bank, N.A and/or certain of its respective affiliates.

Item 2.03.  Creation of a Direct Financial Obligation or an Obligation under an Off- Balance Sheet Arrangement of a Registrant

 

The information set forth in Item 1.01 above under “Amendment to Debt Facilities” is incorporated herein by reference.

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