FAT Brands, the parent company of several franchises including Fatburger, Buffalo’s Cafe and Bonanza Steakhouse, is tokenizing a $30-million bond on the Ethereum blockchain.
According to a report by Forbes, FAT Brands CEO Andy Wiederhorn says the company is working with New York-based and Coinbase-backed Cadence, a digital securitization and investment platform for private credit.
According to the notice about the company’s testing phase, issued last month,
“The $30 million deal would be backed by whole-business cashflows consisting mainly of fees paid by franchises operating under the Beverly Hills company’s brands, including Fatburger, Bonanza Steakhouse, Buffalo’s Cafe, Elevation Burger, Hurricane Grill & Wings and Ponderosa Steakhouse.”
“The assignment would see FAT Brands issue securities via conventional paper contracts, with Cadence then creating digital tokens from those notes.”
“Similar to other issuances arranged by Cadence, a digital asset will be created that is a digital reflection of ownership for every investor in the structured notes.”
“The FAT Brands securitization will also be a private credit issuance.”
According to Cadence founder Nelson Chu,
“The format would enable investors to access a higher level of data about the deal, including the identities of other bond holders.”
The security is expected to hit the market by year end.