1. Arcos Dorados secures $200 million revolving credit facility. 2. New facility replaces existing $75 million facilities, maturing in four years. 3. Interest rates range from SOFR + 210 to 240 basis points. 4. Company emphasizes commitment to financial strategy and growth. 5. Syndicate of seven banks facilitated the new credit facility.
The new credit facility provides significant liquidity, enhancing growth potential. Historical examples show similar moves boost investor confidence, as seen with other franchises leveraging debt strategically.
The new financial strategy is crucial in maintaining liquidity and supporting growth, directly affecting ARCO's market valuation. Given its role as a franchisee, stable capital structures are vital for operational execution and investor confidence.
The structural changes in capital management foster sustainable growth, indicating strong strategic initiatives. Companies that optimize their capital structures tend to see increased valuations over time.
Arcos Dorados Holdings Inc. and its subsidiary Arcos Dorados B.V. (collectively, "Arcos Dorados" or the "Company") have entered into a new $200 million syndicated revolving credit facility ("RCF").
The RCF replaces the Company's existing revolving credit facilities, which totaled $75 million and were or will be terminated as part of the transaction. The RCF has a four-year maturity, beginning September 30, 2025, with an optional one-year extension, and an interest rate of SOFR + 210 basis points up to SOFR + 240 basis points. As of the date of this press release, the RCF remains undrawn.
"This transaction reinforces Arcos Dorados' commitment to pursuing a solid financial strategy and reflects the continued trust and support of our long-standing banking partners," said Mariano Tannenbaum, Executive Vice President and Chief Financial Officer of Arcos Dorados. "We plan to continue proactively managing our capital structure to ensure sustainable growth while leveraging our investment-grade credit rating, efficient treasury operations, and strong balance sheet to support our strategic initiatives, and ongoing operations," he concluded.
The RCF was arranged by a syndicate of seven banks: JPMorgan Chase Bank, N.A. acted as Sole Lead Arranger and Sole Bookrunner; Banco Bilbao Vizcaya Argentaria, S.A., Banco Santander (Brasil) S.A., Bank of America, N.A. and BNP Paribas acted as Mandated Lead Arrangers; and Banco de Crédito del Perú and FirstBank Puerto Rico acted as Lead Managers.
Davis Polk & Wardwell LLP acted as US legal counsel for Arcos Dorados. Milbank LLP acted as US legal counsel for the Sole Lead Arranger and Sole Bookrunner.
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About Arcos Dorados
Arcos Dorados is the world's largest independent McDonald's franchisee, operating in Latin America and the Caribbean. It has the exclusive right to own, operate and grant franchises of McDonald's restaurants in 21 Latin American and Caribbean countries and territories with more than 2,400 restaurants, operated or franchised by the Company or by its sub-franchisees, that together employ more than 100,000 people (as of 06/30/2025). The Company is also committed to the development of the communities in which it operates, to providing young people their first formal job opportunities and to utilize its Recipe for the Future to achieve a positive environmental impact. Arcos Dorados is listed for trading on the New York Stock Exchange (NYSE:ARCO). To learn more about the Company, please visit the Investors section of our website: https://ir.arcosdorados.com/.
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Investor Relations Contact
Dan Schleiniger
VP of Investor Relations
Arcos Dorados
daniel.schleiniger@mcd.com.uy
Media Contact
David Grinberg
VP of Corporate Communications
Arcos Dorados
david.grinberg@mcd.com.uy