Sonic Repurchases $62.5 Million of Debt
Sonic Corp. (NASDAQ: SONC), the nation's largest chain of drive-in restaurants, today announced its repurchase of $62.5 million of the company's Class A-1 variable funding senior notes in a privately negotiated transaction.
"We are pleased with the company's ability and efforts over the past two years to use excess cash effectively to reduce debt and strengthen our balance sheet," said Clifford Hudson, Chairman and Chief Executive Officer. "These purchases, combined with regularly scheduled principal payments, bolster Sonic's capital structure and provide additional financing flexibility to manage our business."
Sonic expects to recognize a gain of approximately $5 million on the extinguishment of the notes. With the completion of this transaction, Sonic's outstanding debt will total approximately $520 million, and Sonic will have more than $30 million of unrestricted cash available for general corporate uses. Sonic is scheduled to make an additional $58 million in principal payments over the remainder of fiscal year 2011.
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