Yum! Brands, Inc. Announces New Securitization Financing Facility
April 21 2016 - 4:16PM
Business Wire
Yum! Brands, Inc. (NYSE: YUM) (the “Company”) today announced
that it plans to refinance the Company’s unsecured term loan
facility (the “Bridge Facility”) with a new securitization
financing facility, issued by newly formed subsidiaries of Taco
Bell (the “Securitization Financing”). The Bridge Facility
currently has outstanding borrowings of approximately $2.0 billion.
The Securitization Financing is expected to be comprised of at
least $2.0 billion of senior term notes securitizing the Taco Bell
U.S. royalties. The net proceeds of the Securitization Financing
are expected to be used for repayment of the Bridge Facility,
payment of transaction costs associated with the refinancing and
for general corporate purposes.
A key aspect of the Company’s strategy is to optimize its
capital structure. Consistent with that, the Securitization
Financing is yet another milestone in our previously communicated
plan of targeting total companywide leverage of approximately 5.0X
EBITDA and returning a total of $6.2 billion of capital to
shareholders prior to the separation of our China business. As the
next step in this plan, subsidiaries that operate our KFC, Pizza
Hut and Taco Bell (excluding the Taco Bell subsidiaries included in
the Securitization Financing) businesses will enter into a new
senior secured credit facility and issue new high-yield notes,
which will be guaranteed by certain of our domestic subsidiaries
and, in case of the new credit facility, secured by certain assets
of the obligors. Our legacy publicly-traded notes will remain in
place as unsecured obligations of the Company.
The Securitization Financing, as well as the new credit facility
and high-yield notes mentioned above, are subject to market and
other conditions and are anticipated to close in the second quarter
of 2016. However, there can be no assurance that the Company will
be able to successfully complete the transactions, on the terms
described above, or at all.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy the Notes or any other security.
The Notes have not been, and will not be, registered under the
Securities Act of 1933, as amended (the “Securities Act”), or any
state securities laws, and may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements of the Securities Act and applicable
state securities laws.
Yum! Brands, Inc., based in Louisville, Kentucky, has nearly
43,000 restaurants in more than 130 countries and territories. Yum!
is ranked #228 on the Fortune 500 List with revenues of over $13
billion in 2015 and is one of the Aon Hewitt Top Companies for
Leaders in North America. The Company's restaurant brands - KFC,
Pizza Hut and Taco Bell - are the global leaders of the chicken,
pizza and Mexican-style food categories. Worldwide, the Yum! Brands
system opens over six new restaurants per day on average, making it
a leader in global retail development.
This announcement may contain “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. We intend all
forward-looking statements to be covered by the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements generally can be identified by the fact
that they do not relate strictly to historical or current facts and
by the use of forward-looking words such as “expect,”
“expectation,” “believe,” “anticipate,” “may,” “could,” “intend,”
“belief,” “plan,” “estimate,” “target,” “predict,” “likely,”
“will,” “should,” “forecast,” “outlook” or similar terminology.
These statements are based on current estimates and assumptions
made by us in light of our experience and perception of historical
trends, current conditions and expected future developments, as
well as other factors that we believe are appropriate and
reasonable under the circumstances, but there can be no assurance
that such estimates and assumptions will prove to be correct.
Forward-looking statements reflect our current expectations,
estimates or projections concerning future results or events,
including, without limitation, statements regarding the intended
capital return to shareholders as well as the related borrowing
required to fund such capital return, the planned separation of the
Yum! Brands and Yum! China businesses, the timing of any such
separation, the future earnings and performance as well as capital
structure of Yum! Brands, Inc. or any of its businesses, including
the Yum! Brands and Yum! China businesses on a standalone basis if
the separation is completed. Forward-looking statements are not
guarantees of performance and are inherently subject to known and
unknown risks, uncertainties and assumptions that are difficult to
predict and could cause our actual results to differ materially
from those indicated by those statements. We cannot assure you that
any of our expectations, estimates or projections will be achieved.
The forward-looking statements included in this announcement are
only made as of the date of this announcement and we disclaim any
obligation to publicly update any forward-looking statement to
reflect subsequent events or circumstances. Numerous factors could
cause our actual results and events to differ materially from those
expressed or implied by forward-looking statements, including,
without limitation: whether we are able to return capital to
shareholders at the times and in the amounts currently anticipated,
if at all, as well as the corresponding costs of borrowing to fund
such capital return as well as other costs; whether the separation
of the Yum! Brands and Yum! China businesses is completed, as
expected or at all, and the timing of any such separation; whether
the operational and strategic benefits of the separation can be
achieved; whether the costs and expenses of the separation can be
controlled within expectations, including potential tax costs; as
well as other risks. In addition, other risks and uncertainties not
presently known to us or that we currently believe to be immaterial
could affect the accuracy of any such forward-looking statements.
All forward-looking statements should be evaluated with the
understanding of their inherent uncertainty. You should consult our
filings with the Securities and Exchange Commission (including the
information set forth under the captions “Risk Factors” and
“Forward-Looking Statements” in our Annual Report or Form 10-K) for
additional detail about factors that could affect our financial and
other results. Reconciliation of non-GAAP financial measures to the
most directly comparable GAAP measures are included on our website
at www.yum.com/investors.
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version on businesswire.com: http://www.businesswire.com/news/home/20160421006663/en/
Yum! Brands, Inc.Analysts are invited to contact:Steve Schmitt,
888-298-6986Vice President, Investor Relations & Corporate
StrategyorElizabeth Grenfell, 888-298-6986Director, Investor
RelationsorMembers of the media are invited to contact:Virginia
Ferguson, 502-874-8200Director, Public Relations
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