TravelCenters of America Closes New $200 Million Term Loan

Rhea-AI Summary

TravelCenters of America Inc. (Nasdaq: TA) has closed a new $200 million senior secured term loan facility. The loan features a 7-year maturity with quarterly amortization and is secured by equity interests in its subsidiaries. Proceeds will fund deferred capital expenditures, IT infrastructure updates, and growth initiatives aligning with the company's Transformation Plan. CEO Jonathan M. Pertchik emphasized the importance of this loan in enhancing liquidity and supporting operational improvements amidst ongoing economic uncertainties.

Positive

• Secured a new $200 million senior secured term loan facility.
• Proceeds aimed at funding deferred capital expenditures and IT upgrades.
• Strengthened balance sheet and increased liquidity for growth initiatives.

Negative

• Economic uncertainty due to the COVID-19 pandemic may adversely impact financial condition.
• Future success of transformation initiatives is uncertain.

TravelCenters of America Inc. (Nasdaq: TA) (“TA”) today announced the closing of a new $200 million senior secured term loan facility (“Term Loan”). Terms of the new loan include interest payable at LIBOR, with a floor of 100 basis points, plus 600 basis points and a seven-year maturity. The loan will amortize in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount, with the balance payable on the final maturity date. The loan is prepayable after two years at par and is secured by a pledge of all the equity interests of substantially all of TA’s wholly owned subsidiaries and a pledge of substantially all of TA’s other assets and the assets of such wholly-owned subsidiaries. TA expects to use the net proceeds from the Term Loan for general business purposes, including funding of deferred capital expenditures, updates to key IT infrastructure, and growth initiatives consistent with its Transformation Plan.

“As we look ahead to 2021, we have the people, the plan, the processes and now the liquidity to advance our transformation playbook to help this great company begin to achieve its potential. This term loan provides for these opportunities, which we will carry out with caution and care while we continue to manage through an uncertain pace of recovery from the pandemic that lies ahead,” said Jonathan M. Pertchik, TA’s Chief Executive Officer. "By closing this new loan, we have further strengthened our balance sheet and given ourselves increased flexibility in a dynamic capital environment. TA is well-positioned to address remedial site-level maintenance and much-needed IT upgrades, as well as fund our growth initiatives."

Citigroup Global Markets Inc., BofA Securities, Inc., PNC Capital Markets, LLC, U.S. Bank National Association and Wells Fargo Securities, LLC served as Joint Lead Arrangers for the Term Loan.

About TravelCenters of America Inc.
TravelCenters of America Inc. (Nasdaq: TA) is the nation's largest publicly traded full-service travel center network. Founded in 1972 and headquartered in Westlake, Ohio, its nearly 20,000 employees serve customers in over 270 locations in 44 states and Canada, principally under the TA®, Petro Stopping Centers® and TA Express® brands. Offerings include diesel and gasoline fuel, truck maintenance and repair, convenience stores, full-service and quick-service restaurants, car and truck parking and other services and amenities dedicated to providing great experiences for professional drivers and the general motoring public. TravelCenters of America operates nearly 650 full-service and quick-service restaurants and 10 proprietary brands, including Quaker Steak and Lube®, Iron Skillet® and Country Pride®. For more information, visit www.ta-petro.com.

Warning Regarding Forward Looking Statements

This press release contains forward looking statements within the meaning of the private securities litigation reform act of 1995 and other securities laws. These forward looking statements are based upon TA's present beliefs and expectations, but these statements are not guaranteed. For example:

• This press release states that TA intends to use the net proceeds from the offering for general business purposes, including funding deferred capital expenditures and updates to key IT infrastructure. However, the proceeds may be used for other purposes.
• Statements about transformational initiatives and implementation of transitional plans may imply that these changes and developments will result in improvements to TA's business, operations and financial results. However, these changes may not be successful or sustainable. Further, even if they are successful and sustainable, other factors and risks may result in TA not achieving the benefits that it expects.
• Statements about TA’s balance sheet and liquidity may imply that TA has sufficient financial resources to fund operations for the foreseeable future, make new capital expenditures and invest in other growth initiatives. However, TA’s business is subject to various risks and uncertainties, many of which are outside TA’s control. For example, the COVID-19 pandemic has significantly negatively impacted the U.S. economy; if the current economic conditions continue for a sustained period or worsen, TA’s business, results of operations and financial condition may be materially adversely impacted. These and other risks and uncertainties may result in TA not having sufficient financial resources to fund operations, make capital expenditures or invest in growth initiatives for the foreseeable future.

For these reasons, among others, investors are cautioned not to place undue reliance upon forward looking statements. Except as required by law, TA does not intend to update or change any forward-looking statement as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201214005716/en/

FAQ

What is the purpose of the $200 million term loan for TravelCenters of America (TA)?

The term loan will fund deferred capital expenditures, IT infrastructure updates, and growth initiatives according to TA's Transformation Plan.

How long is the maturity period for the new term loan taken by TA?

The new term loan has a maturity period of 7 years.

What are the key features of the new loan facility secured by TA?

The loan features LIBOR interest with a 100 basis points floor, amortization in equal quarterly installments, and is secured by equity interests in substantially all subsidiaries and other assets.

Who arranged the term loan for TravelCenters of America (TA)?

The term loan was arranged by Citigroup Global Markets Inc., BofA Securities, PNC Capital Markets, U.S. Bank National Association, and Wells Fargo Securities.

What challenges might affect TravelCenters of America (TA) after securing the term loan?

TA faces economic uncertainties due to the ongoing COVID-19 pandemic, which may adversely impact its business and financial results.