Business Context and Reporting Period
Company: Jack in the Box Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: June 23, 2026
Event: Completion of a securitization financing transaction by Jack in the Box Funding, LLC (Master Issuer), a bankruptcy-remote subsidiary.
Key Financial Metrics and Transaction Details
- Fixed Rate Notes Issued: $500 million in Series 2026-1 7.624% Fixed Rate Senior Secured Notes, Class A-2.
- Revolving Facility: Up to $150 million in Series 2026-1 Variable Funding Senior Secured Notes, Class A-1.
- Initial Drawings: Expected draw of $39 million on the Variable Funding Notes on the closing date.
- Letters of Credit: Approximately $56 million in undrawn letters of credit issued under the Variable Funding Notes.
- Interest Rates:
- Class A-2 Notes: 7.624% fixed rate.
- Variable Funding Notes: Based on prime rate, overnight federal funds rates, SOFR, or commercial paper costs plus applicable margins.
- Maturity: Legal final maturity in May 2056; anticipated repayment date in May 2031.
- Collateral: Secured by substantially all assets of the Securitization Entities, including franchise agreements, real estate, and intellectual property.
Material Changes and Use of Proceeds
The transaction refinanced existing debt obligations. Net proceeds were utilized as follows:
- Repayment in full of $46,113,681.10 in aggregate outstanding principal of Series 2019-1 Class A-2-II Notes.
- Repayment of $479,894,390.00 in aggregate outstanding principal of Series 2022-1 Class A-2-I Notes (partial repayment).
- Termination of commitments regarding the existing $150 million Series 2022-1 Variable Funding Notes.
- Remaining net proceeds distributed to the Holding Company Guarantor and Jack in the Box Inc. for general corporate purposes.
Outlook, Risks, and Covenants
- Covenants: The Master Issuer must maintain specified reserve accounts. The notes are subject to rapid amortization events tied to debt service coverage ratios, gross sales levels of specified restaurants, manager termination events, and change of control.
- Default Risks: Events of default include non-payment, failure to comply with covenants, bankruptcy, and loss of valid security interests in collateral.
- Management Structure: Jack in the Box Inc. acts as the Manager of the Securitization Entities under a Management Agreement, receiving a weekly management fee. The Manager is indemnified against claims arising from its performance unless due to negligence, bad faith, or willful misconduct.
- Extension Options: The Variable Funding Notes may be extended for two one-year periods at the Manager's option.
Investor Verification Checklist
- Verify the specific terms of the "rapid amortization events" and the required debt service coverage ratios in the Indenture.
- Confirm the exact amount of remaining net proceeds distributed to the parent company for general corporate purposes.
- Review the "Second Supplement to the Base Indenture" (Exhibit 4.2) and "Series 2026-1 Supplement" (Exhibit 4.1) for detailed collateral limitations regarding real estate assets.
- Assess the impact of the 7.624% fixed rate on future interest expense compared to the refinanced 2019 and 2022 notes.
- Monitor the utilization of the $150 million Variable Funding Notes facility and associated commitment fees (50-100 basis points).