The November 12 deadline for potential buyers to submit bids for Wendy's International looms ahead. But a shaky financing package assembled by the hamburger chain's banks could throw a wrench in the auction and lead to lower offers.
The Wall Street Journal reports that Wendy's lenders, J.P. Morgan and Lehman Brothers, have begun notifying potential buyers of the terms of a so-called staple financing package for the deal.
The complicated package is anchored by a securitization of the royalty fees that franchisees pay Wendy's . But instead of relying on a bridge loan while that securitization is being arranged, the banks are using a so-called backstop loan that would kick in if the securitization doesn't come through.