O’Charley’s Inc. Closes on New $45 Million Credit Facility

O’Charley’s Inc. (Nasdaq: CHUX) announced today that it has entered into a $45 million secured revolving credit facility, which matures on August 1, 2013, and amends and restates the Company’s existing secured revolving credit facility that was scheduled to mature on October 18, 2011.

Wachovia Bank, National Association is the Administrative Agent, and Banc of America Securities LLC, Regions Bank, and Wells Fargo Securities, LLC are Joint Lead Arrangers and Joint Book Managers.

Compared to the facility that it amends and restates, the terms of the amended credit facility include the following:

• The prior credit facility was $83 million, and scheduled to be reduced to $65 million on April 18, 2010, with a $20 million sublimit for letters of credit. The amended facility is $45 million with a $20 million letter of credit sublimit. The prior facility had nine participating banks, while the amended facility has three.

• The maximum adjusted leverage ratio is now 5.25, compared to 5.50 in the prior facility. The definitions of adjusted leverage ratio and senior secured leverage ratio have been changed, and expansion capital expenditures are limited to 15% of EBITDA in 2010 and 30% of EBITDA in subsequent years.

• The amended facility permits the Company to repurchase its 9% Senior Subordinated Notes due in 2013, subject to certain limitations, while the prior facility prohibited such bond repurchases. The amended facility also ‘resets’ the restricted payments basket for dividends and bond repurchases, although such payments are still restricted by the indenture governing the Company’s Senior Subordinated Notes.

• Under the prior credit facility, the collateral included mortgages on 88 of the Company’s owned restaurants and its corporate offices. The collateral for the amended credit facility includes mortgages on 47 restaurants. The amended facility permits sale-leaseback transactions, and additional secured and unsecured borrowing by the Company, subject to certain limitations.

‘Maintaining our financial flexibility continues to be an important strategic focus for our Company in these challenging economic times,’ stated Larry Hyatt, the chief financial officer of O’Charley’s Inc. ‘By extending the maturity, permitting bond repurchases, and making additional collateral available for other purposes, we believe that this amended and restated facility significantly enhances our financial flexibility. We value our long-term relationships with Wells Fargo, Regions Bank, and Banc of America, appreciate their participation in our new facility, and look forward to working with them in the future.’

The Company expects to recognize approximately $0.5 million of additional interest expense in the first quarter of 2010 for the write-off of unamortized financing costs related to the prior bank facility.