Manatt represented Cadence Group, Inc. in structuring and executing an additional $40 million tranche of subordinated notes, which follows the March 2020 whole business securitization of FAT Brands, Inc., the NASDAQ-listed global franchising company. FAT Brands continues to be a leader in the casual dining industry through its strategic acquisition, marketing and development of casual/fast casual restaurant concepts in the U.S. and abroad. FAT used the net proceeds of the offering to purchase the Johnny Rockets restaurant chain from an affiliate of private equity firm Sun Capital Partners, Inc. for approximately $25 million and the remaining proceeds will be used for future transactions.
In connection with the transaction, DBRS Morningstar issued a confirmation of ratings with respect to the outstanding classes of senior secured and senior subordinated secured notes. The new subordinated notes were not rated. Royalty cash flow will pay principal and interest on all of the notes, including the new tranche of subordinated notes, at a senior priority to payments to FAT Brands.
Cadence Group, Inc. is a New York City-headquartered alternative investment platform that provides high yield investment opportunities to accredited investors by working with originator partners having short-term, forecastable cash-generating assets such as factored invoices and merchant term loans.
Financial services group partners Brian Korn and Neil Faden led the Manatt team. Korn and Faden were assisted by associates June Kim and Tiana Walden. The deal team also included partner Carl Grumer.
More information on the transaction can be found here.