Dine Brands to issue $600 million in secured notes

PASADENA, Calif. - Dine Brands Global, Inc. (NYSE: DIN), the parent company of restaurant chains Applebee’s, IHOP, and Fuzzy’s Taco Shop, currently trading at a modest P/E ratio of 6.25 and offering an attractive dividend yield of 8.27%, has announced its plan to issue $600 million in fixed-rate senior secured notes with an annual interest rate of 6.720%. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics. The Series 2025-1 Class A-2 notes, to be issued by two of Dine Brands’ subsidiaries, are due to be privately placed in a securitization transaction.

These notes, backed by the company’s domestic franchising, rental, and financing assets, are part of a refinancing strategy. The proceeds are intended for repaying existing debts, notably the Series 2019-1 Class A-2-II notes, which had a balance of approximately $594 million as of March 31, 2025, and for general corporate purposes. With total debt standing at $1.64 billion and a current ratio of 0.87, InvestingPro data indicates that short-term obligations exceed liquid assets, making this refinancing particularly significant.

Dine Brands also plans to replace its Series 2022-1 Class A-1 variable funding notes with new notes that align with the maturities of the Class A-2 notes. As of the end of the first quarter of 2025, the company reported $100 million in outstanding loan borrowings and an additional $1 million pledged against these variable funding notes, with $224 million still available under the facility.

The closing of the transactions is anticipated to occur around June 17, 2025, subject to customary closing conditions. The notes offered will not be registered under the Securities Act of 1933 and will be available only to qualified institutional buyers in accordance with Rule 144A under the Securities Act.

Dine Brands, with over 3,500 restaurants across 19 international markets, expanded into the fast-casual segment in 2022, marking a significant development for the company. Notable strengths include maintaining dividend payments for 13 consecutive years, demonstrating consistent shareholder returns. For deeper insights into Dine Brands’ financial health and growth potential, access the comprehensive Pro Research Report available on InvestingPro. This press release is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities.

In other recent news, Dine Brands Global, Inc. reported its second-quarter 2025 financial results, revealing revenue of $215 million, which aligned with consensus estimates. This figure included a $21 million contribution from the acquisition of 47 Applebee’s and 10 IHOP franchisee locations. However, the company faced challenges as same-store sales for Applebee’s and IHOP decreased by 2.2% and 2.7%, respectively. Dine Brands’ adjusted earnings per share (AEPS) of $1.03 fell short of the anticipated $1.23, and adjusted earnings before interest, taxes, depreciation, and amortization (AEBITDA) of $55 million did not meet the expected $57 million.

Additionally, shareholders at Dine Brands Global’s Annual Meeting approved several key proposals, including the election of directors and amendments to the company’s stock incentive plan. Ernst & Young LLP was ratified as the independent auditor for the fiscal year 2025. On the advisory front, executive compensation was approved, reflecting shareholder confidence in the company’s governance.

Benchmark analysts maintained a Hold rating on Dine Brands following the earnings miss, indicating a cautious approach as they assess the company’s recent improvements. Meanwhile, Raymond James reported a rise in short interest among restaurant stocks, with Dine Brands potentially facing volatility as the market anticipates upcoming quarterly earnings. These developments highlight the ongoing challenges and strategic efforts within Dine Brands Global, Inc.

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