The refinancing extends the debt maturity to 2031 and provides $25M of revolver liquidity, significantly reducing near-term refinancing risk. Monitor the company's ability to delever toward the 5.00x Lease-Adjusted Leverage Ratio covenant by late 2029 and track execution of the remaining 8 restaurant refranchising closings expected by fiscal year-end 2026.
Price Chart
Executive Summary
Red Robin Gourmet Burgers, Inc. refinanced its existing secured credit facility with a new $115 million Credit Agreement on October 2, 2026, consisting of a $25 million revolving line of credit and a $90 million term loan, maturing October 2, 2031. The refinancing follows the substantial completion of refranchising transactions that generated approximately $89.4 million in gross proceeds from the sale of 108 company-owned restaurants, with an additional $6.6 million expected from 8 more restaurants. The new facility replaces the prior credit agreement and provides improved financial flexibility to support the company's First Choice Plan.
Key Financial Metrics
Key Facts
- New $115 million Credit Agreement: $25 million revolver + $90 million term loan, maturing October 2, 2031.
- Refinancing follows refranchising of 108 restaurants for ~$89.4 million in gross proceeds; 8 more expected to close for ~$6.6 million.
- Prior credit agreement (dated March 4, 2022) terminated and all outstanding borrowings, accrued interest, and fees paid off.
- Interest on term loan and revolver is SOFR plus 275-350 bps depending on leverage; initial rate is SOFR + 325 bps.
- Company may increase facility by up to an additional $20 million in the future, subject to lender participation.
- Term loan requires quarterly principal payments: 5.0% annually for first 2 years, 7.5% for next 2 years, 10% thereafter.
- Borrowings secured by substantially all assets of borrower and guarantors; new Pledge and Security Agreement executed.
- Financial covenants include maximum Lease-Adjusted Leverage Ratio (starting at 5.75:1.00, stepping down to 5.00:1.00) and minimum Lease-Adjusted Fixed Charge Coverage Ratio (1.10:1.00 initially, then 1.20:1.00).
- Consolidated EBITDA deemed amounts for recent quarters: Q2 2026 = $13.1M, Q1 2026 = $19.3M, Q4 2025 = $8.7M, Q3 2025 = $4.9M.
- Consolidated EBITDAR deemed amounts: Q2 2026 = $27.1M, Q1 2026 = $38.1M, Q4 2025 = $18.1M, Q3 2025 = $19.4M.
Financial Impact
New $115M credit facility replaces prior debt; refranchising generated ~$89.4M in gross proceeds with ~$6.6M more expected. Interest rate SOFR + 325 bps initially, stepping down with leverage. Term loan amortization starts at 5% annually.
Risk Factors
- Lease-Adjusted Leverage Ratio covenant tightens from 5.75x to 5.00x over time; failure could trigger default or require cure equity issuance.
- Remaining refranchising of 8 restaurants (~$6.6M) may not close as expected.
- Casual dining sector faces consumer spending headwinds and labor cost inflation.
- Interest rate exposure: SOFR-based floating rate could increase interest costs if the Fed maintains a higher-for-longer rate environment.
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001104659-26-113514 |
| Document: tm2626832d1_ex10-2.htm | 0001104659-26-113514 |
| Document: tm2626832d1_8k.htm | 0001104659-26-113514 |
| Document: tm2626832d1_ex99-1.htm | 0001104659-26-113514 |
| Document: 0001104659-26-113514-index-headers.html | 0001104659-26-113514 |
| Document: 0001104659-26-113514-index.html | 0001104659-26-113514 |
| Document: 0001104659-26-113514.txt | 0001104659-26-113514 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 5, 2026 22d ago | 8-K | $8.05 $8.36 | ▲ +3.85% | ▲ +3.30% | $8.19 (+1.74%) |
Sep 17, 2026 5w ago | 8-K | $7.05 $7.01 | ▼ −0.57% | ▼ −2.12% | $8.19 (+16.17%) |
Jun 15, 2026 19w ago | 8-K | $6.05 $6.31 | ▲ +4.30% | ▲ +5.55% | $8.19 (+35.37%) |
May 28, 2026 21w ago | 8-K | $5.06 $5.16 | ▲ +1.98% | ▲ +1.72% | $8.19 (+61.86%) |
May 19, 2026 23w ago | 8-K | $4.55 $4.66 | ▼ −2.42% | ▼ −2.22% | $8.19 (−80.00%) |
May 1, 2026 25w ago | 8-K | $3.58 $3.53 | ▼ −1.40% | ▼ −2.19% | $8.19 (+128.77%) |
Mar 26, 2026 30w ago | DEFA14A | $2.65 $2.59 | ▼ −2.26% | ▼ −1.91% | $8.19 (+209.06%) |
Mar 16, 2026 32w ago | Insider Cluster | $3.27 $3.34 | ▲ +2.14% | ▲ +1.87% | $8.19 (+150.46%) |
Mar 16, 2026 32w ago | Insider Cluster | $3.27 $3.34 | ▲ +2.14% | ▲ +1.87% | $8.19 (+150.46%) |
Feb 25, 2026 34w ago | 8-K | $4.83 $5.03 | ▲ +4.14% | ▲ +4.62% | $8.19 (+69.57%) |
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