Arcos Dorados Holding Inc. (NYSE: ARCO) To Retire $80 Million In Debt

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Arcos Dorados Holding Inc. (NYSE: ARCO) is in the process of eliminating $80 million debt that is part of its senior notes that were due to mature in 2023. The decision to retire the notes early is expected to allow the company to lower its interest expenses. More than the anticipated notes were offered for tendering.

Arcos Dorados Holding Inc. (NYSE:ARCO)’s calls for notes tendering generated so much interest from noteholders that some tendered notes will be returned to their owners. The maximum that Arcos set aside for the early retirement of a portion of the 2023 notes is $80 million. But more about $98.8 million worth of notes were tendered.

Therefore, unless Arcos Dorados Holding Inc. (NYSE: ARCO) increases its notes repurchase allocation, about $18.8 million notes that had been tendered will be returned to the owners.

Early tender payment

Arcos Dorados Holding Inc. (NYSE: ARCO) said that notes tendered after the early tender time will not be eligible for early tender payment. As such, those notes tenders after the early tender time will receive $980 from each $1,000. That represents the total consideration for the retirement of the notes minus the early tender payment benefit.

Dropping some interest expenses

It was not immediately clear how much Arcos expects to save in interest expenses through the early retirement of a portion of the 2023 notes. However, it is a move that would see the company drop some of its interest burden and leading to savings that can be reinvested in the business or channeled back to shareholders.

Outstanding debt for Arcos Dorados Holding Inc. (NYSE: ARCO)

Of the portion of the 2023 debt that will remain outstanding, their terms will not be changed. Arcos Dorados Holding Inc. (NYSE:ARCO) clearly said that the early retirement of a portion of the notes didn’t mean that it was amending the schedule of the original notes. As such, the interest and the maturity of the outstanding notes remain unaffected.

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