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Subsequent Event
6 Months Ended
Feb. 29, 2016
Subsequent Event [Abstract]  
Subsequent Event

7.Subsequent Events

 

Subsequent to the end of the second fiscal quarter of 2016, the Company announced that certain of its subsidiaries intend to complete a financing transaction, which will include prepaying the 2011 Fixed Rate Notes with proceeds from the sale of a new series of securitized debt, as well as refinancing the 2011 Variable Funding Notes. The Company’s subsidiaries intend to issue approximately $425.0 million of new fixed rate notes (the “2016 Notes”) and enter into a new $150.0 million variable funding note facility.  As of February 29, 2016, the Company had $3.4 million in unamortized deferred loan costs associated with the 2011 Fixed Rate Notes and 2011 Variable Funding Notes of which all or a portion could be written off in conjunction with this transaction.  The deferred loan costs are included in other assets, net in the accompanying condensed consolidated balance sheet.

   

The net proceeds from the sale of the 2016 Notes will be used to retire the 2011 Fixed Rate Notes and pay down the existing 2011 Variable Funding Notes, which had a balance of $267.6 million and $72.0 million, respectively, as of February 29, 2016.  The new variable funding note facility will replace the existing 2011Variable Funding Notes.

 

The consummation of the offering is subject to market and other conditions and is anticipated to close in the fiscal third quarter of 2016. However, there can be no assurance that the Company will be able to successfully complete the financing transaction, on the terms described or at all.

 

Effective March 1, 2016,  the Company established the Brand Technology Fund (“BTF”).  Both Company and Franchise Drive-Ins will pay a set technology fee to the BTF, which will administer cybersecurity and other technology programs.  The BTF funds do not constitute assets of the Company and the Company acts with limited agency in the administration of these funds.  Accordingly, neither the revenues and expenses nor the assets and liabilities of the BTF will be included in the Company’s consolidated financial statements.  However, technology fees paid by Company Drive-Ins will be recorded as an expense on the Company’s financial statements, and the BTF will pay the Company a fee to offset administrative services provided by the Company on behalf of the BTF.