Ann Arbor, Mich.-based Domino's Pizza Inc. announced it is postponing the proposed early refinancing of its existing securitized debt due to volatility in the financial markets. Wall Street fell more than 500 points twice this week following contentious debt-ceiling debates in Washington, D.C., and growing fears over debt problems in Europe.
Domino's existing securitized debt requires interest-only payments until April 2012 and can be extended on an interest-only basis until April 2014 through two one-year extensions if Domino's meets certain requirements, which it currently meets.
The company expects to maintain the flexibility to take advantage of these interest-only periods. The existing securitized debt includes a prepayment penalty if refinanced prior to January 2012. In the meantime, Domino's will continue to monitor the financial markets.
In April 2007, Domino's entered into a $1.85 billion securitized financing facility consisting of $1.7 billion of fixed rate notes and $150 million of variable funding notes.
As of June 19, 2011, its current outstanding securitized debt was $1.45 billion, as the company utilized its free cash flow to repurchase debt in the open market.
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