October 1, 2008 / 6:23 PM / 10 years ago

UPDATE 1-Sonic says franchisees have financing available

LOS ANGELES, Oct 1 (Reuters) - Sonic Corp (SONC.O), responding to news reports about the impact of tighter credit markets on its franchisees, said on Wednesday it has not been informed of any cut-back in franchisee financing.

The company, known for its drive-in restaurants, said it continued to have other financing sources beyond GE Capital [GECAIC.UL], which represents less than 10 percent of the lending to Sonic franchisees.

Last week, Dow Jones reported that Sonic chief financial officer Stephen Vaughan said he had heard that GE Capital’s franchise finance arm would temporarily stop financing new loans to franchisees.

That same story said GE Capital spokesman Stephen White stopped short of saying there was a total freeze on lending to new franchisees. White also said GE’s franchise finance arm had become more critical in making new loans but that it continued to do business with existing customers.

In its statement on Wednesday, Sonic said the current state of the U.S. economy was challenging and could become more so, but that Sonic and its franchisees “are positioned for future growth and increased development.”

Shares in Sonic were down 1.17 percent at $14.40 in afternoon trade on the Nasdaq. (Reporting by Lisa Baertlein)

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