Darden Restaurants the parent of casual-dining institutions including the Olive Garden and LongHorn Steakhouse said this morning that it was entering into 2 credit agreements totaling $1.9 billion. DRI officials have signed a $750 million revolving credit agreement and a $1.15 billion 364-day credit agreement. Both loans are senior unsecured debt obligations.
Proceeds from the latter, larger sum may only be used to help fund the acquisition of RARE Hospitality International, as well as to finance fees and expenses related to the buyout. The $1.15 billion may also be used to repay existing debt and loans and to support commercial paper issuances.
The $750 million in revolving credit matures on September 20, 2012. Its proceeds are earmarked for commercial paper back-up, working capital and capital expenditures, various refinancing efforts, and general corporate purposes.
Darden officials noted today that it ended its prior $500 million credit agreement and has repaid all outstanding loans from that arrangement.
Technically speaking, DRI is flat in pre-market trading. Last week, the stock edged above its 20-week moving average, closing above this trendline for the first time since August 3. Over the course of last week, the stock appreciated nearly 3.3%.