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Item 2.03.
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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As previously disclosed, Applebee’s Funding LLC and IHOP Funding LLC (the “Co-Issuers”), each a special purpose, wholly-owned indirect subsidiary of Dine Brands Global, Inc., a Delaware corporation (the “Corporation”) entered into a revolving financing facility (the “Revolver”) by issuing the 2019-1 Variable Funding Senior Notes, Class A-1 (the “Class A-1 Notes”), the material terms of which are described in the section “Liquidity and Capital Resources” in Part II, Item 7 of the Corporation’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2020, and incorporated herein by reference, and in the Corporation’s Current Report on Form 8-K filed with the SEC on June 5, 2019 (the “Form 8-K”), and incorporated herein by reference.
The Class A-1 Notes are governed in part by the Class A-1 Note Purchase Agreement, dated June 5, 2019, among the Co-Issuers, certain special-purpose, wholly-owned indirect subsidiaries of the Corporation, each as a Guarantor, the Corporation, as manager, certain conduit investors, financial institutions and funding agents, and Barclays Bank PLC, as provider of letters credit, swingline lender and administrative agent (the “Purchase Agreement”) and by certain generally applicable terms contained in the Base Indenture, dated as of September 30, 2014, and amended and restated as of June 5, 2019 (the “Base Indenture”) and the Series 2019-1 Supplement to the Base Indenture, dated June 5, 2019 (the “Series 2019-1 Supplement”), among the Co-Issuers and Citibank, N.A., as the trustee and securities intermediary. Copies of the Purchase Agreement, Base Indenture, and Series 2019-1 Supplement are filed as exhibits to the Form 8-K.
From March 17 to March 19, 2020, the Co-Issuers drew down a total of $220 million of the available amount under the Revolver (the “Draw”), resulting in a total of approximately $223 million that is currently outstanding under the Revolver (including approximately $3 million in letters of credit). The current interest rate for borrowings under the Revolver is the three-month LIBOR rate plus 2.15% for 60% of the advances and the commercial paper funding rate of our conduit investor plus 2.15% for the remaining portion of the advances. It is anticipated that the principal and interest on the Revolver will be repaid in full on or prior to the quarterly payment date in June 2024, subject to two additional one-year extensions at the option of the Corporation upon the satisfaction of certain conditions.
The proceeds of the drawdown will be available for general corporate purposes. Although the Corporation has no immediate need for additional liquidity, in light of current market conditions and uncertainty related to the COVID-19 outbreak, the Co-Issuers drew on the Revolver to enhance their and the Corporation’s long-term financial flexibility.