Arcos Dorados Announces Extension of Cash Tender Offer for Any and All of Its Outstanding 5.875% Notes Due 2027

Rhea-AI Summary

Arcos Dorados Holdings Inc. (NYSE: ARCO) has extended the expiration deadline of its cash tender offer for its outstanding 5.875% Notes due 2027. The offer's expiration time has been extended from 8:00 a.m. to 5:00 p.m., New York City time, on January 23, 2025.

As of 8:00 a.m. on January 23, 2025, $130,115,000 in aggregate principal amount of Notes have been validly tendered. The tender offer is being made in connection with a proposed offering of new U.S. dollar denominated senior notes to be issued by Arcos Dorados B.V.

Holders who tender their Notes and wish to subscribe for the New Notes should obtain a Unique Identifier Code from a Dealer Manager. Priority may be given to investors tendering with Unique Identifier Codes in the allocation of New Notes, though this is not guaranteed.

Positive

• Significant participation with $130.1M of notes already tendered
• Potential debt refinancing through new notes offering indicates proactive financial management

Negative

• Additional debt issuance through new notes may increase company's debt burden

Insights

Fixed Income Analyst

This debt refinancing operation by Arcos Dorados represents a strategic move to optimize their capital structure. The extension of the tender deadline for the 5.875% Notes due 2027 suggests strong market interest, with $130.1 million already tendered, representing a significant portion of the outstanding notes. This early participation level indicates positive reception from bondholders.

The simultaneous execution of a tender offer while launching a new notes offering is a sophisticated liability management approach that serves multiple purposes:

• It allows the company to potentially reduce its interest expense if the new notes are issued at a lower rate than the existing 5.875% notes
• The strategy provides an opportunity to extend debt maturities, improving the company's debt profile
• The prioritization of existing noteholders in the new offering (through Unique Identifier Codes) is a bondholder-friendly approach that typically ensures higher participation rates

The timing of this refinancing is particularly strategic, as it allows Arcos Dorados to take advantage of the current market conditions before potential volatility in emerging markets debt. The participation of five major financial institutions as dealer managers (BBVA, Citigroup, Itau, J.P. Morgan and Santander) adds credibility to the operation and suggests a well-coordinated distribution strategy for the new notes.

The success of this refinancing will strengthen Arcos Dorados' financial position in the competitive quick-service restaurant sector, particularly important given their significant presence across Latin American markets where financial flexibility is important for operational expansion and market share maintenance.

(CUSIP NOS. 03965U AC4 / G0457F AC1; ISINs US03965UAC45 / USG0457FAC17)

MONTEVIDEO, Uruguay--(BUSINESS WIRE)-- Arcos Dorados Holdings Inc. (NYSE: ARCO) (“Arcos Dorados” or the “Company”) today announced that it has extended the expiration deadline of its previously announced offer to purchase for cash any and all of its outstanding 5.875% Notes due 2027 (the “Notes”) (the “Offer”).

The Offer was previously scheduled to expire at 8:00 a.m., New York City time, on January 23, 2025 and will instead expire at 5:00 p.m., New York City time, on January 23, 2025 (the “Expiration Time”), unless further extended or early terminated by Arcos Dorados. If a holder of a Note has already validly tendered and not validly withdrawn Notes pursuant to the original Offer, such holder of Notes is not required to take any further action with respect to such Notes and such tender constitutes a valid tender for purposes of the Offer, as amended by this press release.

As of 8:00 a.m., New York City time, on January 23, 2025, $130,115,000 in aggregate principal amount of Notes outstanding have been validly tendered and not validly withdrawn pursuant to the Offer.

Holders of Notes who have not already done so may validly tender their Notes until the Expiration Time (as extended by this announcement). The Withdrawal Deadline was previously scheduled to expire at 8:00 a.m. New York City time, on January 23, 2025, and will instead expire at 5:00 p.m. New York City time, on January 23, 2025. Holders of Notes who validly tender their Notes on or before the Expiration Time are eligible to receive the Consideration in connection with any such Notes accepted for tender.

The obligation of Arcos Dorados to purchase Notes in the Offer is conditioned on the satisfaction or waiver of certain conditions, including, without limitation, the Financing Condition, described in the Offer Documents. Arcos Dorados reserves the right, in its sole discretion, to amend or terminate the Offer at any time.

The Offer is being made in connection with a proposed offering of U.S. dollar denominated senior notes (the “New Notes”) to be issued by Arcos Dorados B.V., a subsidiary of Arcos Dorados (the “Proposed New Notes Offering”). The Proposed New Notes Offering will be exempt from the registration requirements of the U.S. Securities Act of 1933, as amended.

The offering of New Notes was announced on January 17, 2025. Tendering Holders who wish to tender their Notes for cash and also subscribe for the New Notes should quote a unique identifier code corresponding to the New Notes being subscribed (“Unique Identifier Code”), which can be obtained by contacting any of the Dealer Managers, in their acceptance to DTC through the DTC Automated Offer Program (“ATOP”) or Electronic Acceptance Instruction. A Unique Identifier Code is not required for a Holder to tender its Notes, but if a tendering Holder wishes to subscribe for the New Notes, such Holder should obtain a Unique Identifier Code from a Dealer Manager and enter the Unique Identifier Code in its ATOP.

Arcos Dorados will review tender instructions received on or prior to the pricing date of the New Notes, and may give priority to those investors tendering with Unique Identifier Codes in connection with the allocation of New Notes. However, no assurances can be given that any Holder that tenders its Notes will be given an allocation of New Notes at the levels it may subscribe for, or at all.

The Company reserves the right, in its sole and absolute discretion, to extend, withdraw, terminate or amend the terms and conditions of the Offer at any time for any reason.

The information and tender agent for the Offer is Global Bondholder Services Corporation. To contact the information and tender agent, banks and brokers may call +1 (212) 430-3774, and others may call U.S. toll-free: +1 (855)-654-2015 or email contact@gbsc-usa.com. Additional contact information is set forth below.

By Mail, Hand or Overnight Courier 65 Broadway – Suite 404 New York, NY 10006 Attention: Corporate Actions

By Facsimile Transmission +1 (212) 430-3775/3779 Attention: Corporate Actions

Confirmation by Telephone +1 (212) 430-3774 Toll free: +1 (855) 654-2015

E-mail   contact@gbsc-usa.com

Copies of each of the Offer Documents are available at the following web address: https://www.gbsc-usa.com/arcos/

Any questions or requests for assistance or for additional copies of this notice may be directed to the Dealer Managers at their respective telephone numbers set forth below or, if by any Holder, to such Holder’s broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.

The Dealer Managers for the Offer are:

BBVA Securities Inc.	Citigroup Global Markets Inc.	Itau BBA USA Securities, Inc.	J.P. Morgan Securities LLC	Santander US Capital Markets LLC
Two Manhattan West, 375 9th Ave, 9th Floor, New York, NY 10001 United States	388 Greenwich Street, Trading 4th Floor New York, NY 10013 United States	599 Lexington Avenue, 34th Floor, New York, NY 10022 United States	383 Madison Avenue, 6th Floor New York, NY 10179 United States	437 Madison Avenue New York, NY 10022 United States
Attn: Liability Management	Attn: Liability Management Group	Attn: Debt Capital Markets	Attn: Latin America Debt Capital Markets	Attn: Liability Management
E-mail: liabilitymanagement@bbva.com	E-mail: ny.liabilitymanagement@citi.com			E-mail: AmericasLM@santander.us
Collect: (212) 728-2446 Toll-Free: +1 (800) 422-8692	Collect: +1 (212)-723-6106 Toll-Free: +1 (800) 558-3745	Collect: +1 (212) 710-6749 Toll Free: +1 (888) 770-4828	Collect: +1 (212) 834-7279 Toll Free: +1 (866) 846-2874	Collect: +1(212) 350-0660 Toll Free: +1(855) 404-3636

This notice does not constitute or form part of any offer or invitation to purchase, or any solicitation of any offer to sell, the Notes or any other securities in the United States or any other country, nor shall it or any part of it, or the fact of its release, form the basis of, or be relied on or in connection with, any contract therefor. The Offer is made only by and pursuant to the terms of the Offer Documents, and the information in this notice is qualified by reference to the Offer and the Notice of Guaranteed Delivery. None of Arcos Dorados, the Dealer Managers or the information and tender agent makes any recommendation as to whether Holders should tender their Notes pursuant to the Offer.

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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 20 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 09/30/2024). 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: www.arcosdorados.com/ir.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250123424847/en/

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

Source: Arcos Dorados Holdings Inc.

FAQ

What is the new expiration time for ARCO's tender offer of 5.875% Notes due 2027?

The tender offer has been extended to 5:00 p.m., New York City time, on January 23, 2025, from the previous deadline of 8:00 a.m. on the same day.

How much of ARCO's 2027 Notes have been tendered as of January 23, 2025?

$130,115,000 in aggregate principal amount of Notes have been validly tendered and not withdrawn as of 8:00 a.m., New York City time, on January 23, 2025.

What is the purpose of ARCO's Unique Identifier Code in the tender offer?

The Unique Identifier Code is required for holders who wish to both tender their existing Notes and subscribe for the New Notes. Holders with these codes may receive priority in New Notes allocation.

How is ARCO financing the tender offer for the 2027 Notes?

The tender offer is being financed through a proposed offering of new U.S. dollar denominated senior notes to be issued by Arcos Dorados B.V., a subsidiary of Arcos Dorados.