Potential buyers for Wendy's International Inc. (WEN) have a Nov. 12 deadline to submit bids for the hamburger chain, but a shaky financing package assembled by Wendy's banks could throw a wrench in the auction and lead to lower offers.
Wendy's lenders, J.P. Morgan (JPM) and Lehman Brothers (LEH), began notifying potential buyers this week of the terms of a so-called staple financing package for the deal, according to a person familiar with the situation.
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.
