Toronto Stock Exchange: BPF.UN

VANCOUVER, BC , June 30, 2026 /CNW/ - Boston Pizza Royalties Income Fund (the "Fund"¹) (TSX: BPF.UN) and Boston Pizza International Inc. ("BPI"²) today announced that the Fund's subsidiaries, Boston Pizza Royalties Limited Partnership ("Royalties LP") and Boston Pizza Holdings Limited Partnership ("Holding LP", and together with Royalties LP, the "Partnerships"), and BPI each entered into a fourth supplemental credit agreement (collectively, the "Supplemental Credit Agreements") with a Canadian chartered bank (the "Bank") to amend and extend the credit facilities of the Partnerships (the "Fund's Amended and Extended Credit Facilities") and the credit facilities of BPI ("BPI's Amended and Extended Credit Facilities"), each of which were scheduled to mature on July 1, 2026, for a three-year period maturing on July 1, 2029.

"The three-year renewal of the Fund's and BPI's credit facilities provides continued financial stability and flexibility for both the Fund and BPI," said Michael Harbinson, Chief Financial Officer of BPI and the Fund.  "The modest increase in interest rates for the Fund and BPI are reflective of the overall increase in the cost of capital Canadian banks are experiencing due to current macroeconomic factors.  The renewed facilities extend our debt maturities through 2029 and support our continued focus on maintaining a strong and stable business for all stakeholders."

Key highlights of the Supplemental Credit Agreements are as follows:

The Fund's Amended and Extended Credit Facilities:

1. The maturity date was extended from July 1, 2026 to July 1, 2029;
   
   
2. The interest rates (or margins, as the case may be) applicable to the Fund's credit facilities increased modestly depending on the Fund's total funded net debt to EBITDA ratio and the availment option selected.  In the case of Canadian prime rate loans, the interest rate is now equal to the Bank's prime rate plus between 0.10% and 0.50% (depending on the Fund's total funded net debt to EBITDA ratio) and, in the case of Canadian Overnight Repo Rate Average ("CORRA") loans, the interest rate is equal to: (i) CORRA; plus (ii) a credit spread adjustment ("CSA") of either 0.29547% or 0.32156% depending on whether the CORRA loan has a one-month or three-month interest period; plus (iii) between 1.60% and 1.80% (depending on the Fund's total funded net debt to EBITDA ratio);
   
   
3. The standby fee applicable to the Fund's credit facilities is between 0.32% and 0.36%, depending on the Fund's total funded net debt to EBITDA ratio;
   
   
4. The maximum term permitted for interest rate swaps in Canadian dollars was reduced to seven years, down from ten years, with rights to renew, solely for the purpose of hedging interest rate risk and not for speculative purposes; and
   
   
5. The guarantees and security supporting the Fund's Amended and Extended Credit Facilities remain unchanged from those existing immediately prior to the Supplemental Credit Agreements.

The Fund's Amended and Extended Credit Facilities are comprised of: (i) a $2.0 million committed revolving operating facility issued to Royalties LP ("Facility A"); (ii) a $53.3 million committed non-revolving credit facility issued to Royalties LP for the purpose of refinancing previous credit facilities, facilitating the Fund's repurchasing and canceling of units of the Fund under normal course issuer bids or substantial issuer bid arrangements, financing the cash component of any exchange of general partnership units of BP Canada LP ("Facility B"); and (iii) a $33.3 million committed revolving credit facility issued to Holding LP for the purpose of subscribing for Class 1 LP Units and Class 2 LP Units of Boston Pizza Canada Limited Partnership ("Facility D").  The Fund's Amended and Extended Credit Facilities are due and payable on maturity, and interest accrued on outstanding amounts must be paid monthly in arrears.  No amounts are drawn on Facility A, and Facilities B and D are currently fully drawn.

The obligations of the Partnerships under the Fund's Amended and Extended Credit Facilities are secured by a first charge over the assets of the Partnerships.  The Fund's Amended and Extended Credit Facilities are also guaranteed by the Fund and its other subsidiaries and such guarantees are secured by a first charge over the assets of the Fund and its subsidiaries, as applicable.

The principal financial covenants of the Fund's Amended and Extended Credit Facilities are that: (a) the Fund and its subsidiaries (including the Partnerships), taken as a whole, shall maintain a total funded net debt to EBITDA ratio of not greater than 2.25:1 (tested quarterly); and (b) the total amount of certain permitted distributions of the Fund (including distributions to holders of units of the Fund) must not exceed the sum of the Fund's distributable cash and cash on hand by greater than $2.0 million (tested quarterly on a trailing 12-month basis).

Neither BPI nor any of its subsidiaries has guaranteed or provided any security in respect of the Fund's Amended and Extended Credit Facilities.  Full particulars of the Fund's Amended and Extended Credit Facilities, including applicable interest rates, security, guarantees and other terms and conditions are contained within the following agreements between the Fund and the Bank, a copy of each of which is available on the Fund's profile on SEDAR+ at www.sedarplus.com: (i) the First Amended and Restated Credit Agreement dated January 24, 2020; (ii) the First Supplemental Credit Agreement dated June 22, 2020; (iii) the Second Supplemental Credit Agreement dated June 28, 2022; (iv) the Third Supplemental Credit Agreement dated June 14, 2024; and (v) the Fourth Supplemental Credit Agreement dated June 30, 2026.

BPI's Amended and Extended Credit Facilities:

1. The maturity date was extended from July 1, 2026 to July 1, 2029;
   
   
2. The total amount of credit available was decreased by $21.4 million, from $34.0 million to $12.6 million by decreasing the size of the Term Loan (defined below) from $24.0 million to $2.6 million, to reflect repayments of principal previously made by BPI, including the $0.4 million BPI repaid on June 30, 2026;
   
   
3. The interest rates (or margins, as the case may be) applicable to BPI's credit facilities increased modestly depending on BPI's Total Funded Net Debt (defined below) to EBITDA ratio and the availment option selected.  In the case of Canadian prime rate loans, the interest rate is now equal to the Bank's prime rate plus between 0.10% and 0.90% (depending on the Total Funded Net Debt to EBITDA ratio) and, in the case of CORRA loans, the interest rate is equal to: (i) CORRA; plus (ii) a CSA of either 0.29547% or 0.32156% depending on whether the CORRA loan has a one-month or three-month interest period; plus (iii) between 1.60% and 2.10% (depending on BPI's Total Funded Net Debt to EBITDA ratio);
   
   
4. The standby fee applicable to BPI's credit facilities is between 0.32% and 0.42%, depending on BPI's Total Funded Net Debt to EBITDA ratio;
   
   
5. The covenant requiring the market value of the Class B general partnership units of Royalties LP and the Class 2 general partnership units of BP Canada LP pledged by a subsidiary of BPI to the Bank, which are exchangeable for units of the Fund³, to equal or exceed the total outstanding advances under BPI's credit facilities was eliminated;
   
   
6. Certain other provisions were modified; and
   
   
7. The guarantees and security supporting BPI's Amended and Extended Credit Facilities remain unchanged from those existing immediately prior to the Supplemental Credit Agreements.

BPI's Amended and Extended Credit Facilities are comprised of: (i) a $10.0 million committed revolving facility to cover BPI's day-to-day operating requirements if needed (the "Operating Line"); and (ii) a $2.6 million committed non-revolving term facility that was used to finance the reorganization of BPI and its shareholders on September 30, 2017 (the "Term Loan").  The Term Loan and the principal amount drawn on the Operating Line are due and payable on maturity, and interest accrued on outstanding amounts must be paid monthly in arrears.  The principal amount drawn on the Term Loan must be reduced by quarterly payments of $0.4 million each.  No amounts are drawn on the Operating Line and the Term Loan is currently fully drawn.

The obligations of BPI under BPI's Amended and Extended Credit Facilities are secured by a charge over BPI's assets.  BPI's Amended and Extended Credit Facilities are guaranteed by BPI's wholly-owned subsidiaries, all of whom have granted security for their obligations under those guarantees.  No security has been given by BP Canada LP in respect of BPI's Amended and Extended Credit Facilities.

The principal financial covenants of BPI's Amended and Extended Credit Facilities are that: (a) BPI and its subsidiaries, taken as a whole, shall maintain a Total Funded Net Debt to EBITDA ratio of not greater than 3.00:1 (tested quarterly on a trailing 12-month basis); and (b) BPI and its subsidiaries, taken as a whole, shall not permit its: (i) pre-distribution debt service coverage ratio to be less than 1.25:1 (tested quarterly on a trailing 12-month basis); and (ii) post-distribution debt service coverage ratio to be less than 1.00:1 (tested quarterly on a trailing 12-month basis).  "Total Funded Net Debt" is defined as all indebtedness excluding accounts payable, short‑term non-interest bearing unsecured debt, deferred income taxes and certain related party debt net of cash on the balance sheet, generated from operations and held in accounts at the Bank.

Neither the Fund nor any of its subsidiaries has guaranteed or provided any security in respect of BPI's Amended and Extended Credit Facilities.

No changes were made to the general security agreements previously granted by BPI and certain of its subsidiaries to secure payments of Royalty⁴ and Distribution Income⁴ to the Partnerships, as amended in 2022.

ABOUT US

The Fund is a limited purpose open ended trust with an excellent track record for investors since its IPO in 2002.  Including the May 2026 distribution which was paid on June 30, 2026, the Fund has paid out 281 monthly distributions and four special distributions totaling $498.7 million or $29.59 per unit.  The Fund earns revenue based on the franchise system sales of the 372 Boston Pizza restaurants in the Fund's royalty pool.

Boston Pizza is the premier casual dining brand in Canada.  The first Boston Pizza restaurant opened in Edmonton, Alberta in 1964 and over 60 years later Boston Pizza proudly remains a 100% Canadian company serving communities from coast-to-coast-to-coast.  It boasts a vast network of local franchise owners who collectively operate the largest number of dining rooms, sports bars, and patios across the nation, complemented by robust takeout and delivery services.  Boston Pizza International Inc. has been recognized as a Franchisees' Choice Designation winner and a Platinum Member of Canada's 50 Best Managed Companies for many years, and has received awards from Great Place To Work in the categories of Best Workplaces: in Canada – 100-999 Employees, in British Columbia, in Retail & Hospitality, for Mental Wellness, for Women, for Giving Back, and with Most Trusted Executive Teams.

The trustees of the Fund have approved the contents of this news release.

SOURCE Boston Pizza Royalties Income Fund