MONTEVIDEO, Uruguay – Arcos Dorados received a R$613.9 million ($167.3 million) loan under a four-year secured loan agreement through its Brazilian subsidiary, Arcos Dourados Comercio de Alimentos Ltda. Arcos Dorados is the world’s largest McDonald’s franchisee in Latin America and the Caribbean. The company said proceeds will be used primarily to repay a Brazilian reais-denominated bond maturing on July 13.
“Our ability to secure this loan demonstrates the strength of our financial position, as well as the market’s confidence in our future prospects,” said Jose Carlos Alcantara, CFO for Arcos Dorados. “We remain focused on reducing our net debt levels as part of our long-term strategic plan, and expect improved operating cash flow generation and the proceeds from our asset monetization strategy to help us achieve this goal.”
The loan has a full-amortizing payment schedule with prepayment penalty. The interest rate is tied to the Interbank Market reference interest rate plus 4.50 percent, the company said in a news release. Payments will be made quarterly starting in June with principal payments to be made semi-annually beginning September 2017. Arcos Dorados said the loan is secured by credit and debit card receivables from sales in Brazilian restaurants owned by the company.
Arcos Dorados structured the transaction with Citibank, Itaú, Santander, Bank of America and JP Morgan.
