Yum! Brands to sell $500 million five-year notes in Monday drive-by; 7¾% area yield expected

By Paul A. Harris

Portland, Ore., March 30 – After being closed for nearly a month, sidelined by volatility related to the global coronavirus pandemic, the high-yield new issue market reopened on Monday with dealers announcing a drive-by offering from Yum! Brands, Inc., according to market sources.

The Louisville, Ky.-based fast food company, whose brands include KFC, Taco Bell and Pizza Hut, plans to sell $500 million of five-year senior notes (existing ratings B1/B+) later on Monday following a mid-morning conference call with investors.

The deal is expected to come with a yield in the 7¾% area and is playing to orders in excess of $3.5 billion, according to an investor.

Goldman Sachs & Co. LLC is the left bookrunner. Wells Fargo Securities LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, BofA Securities Inc. and Morgan Stanley & Co. LLC are the joint bookrunners.

The Rule 144A and Regulation S for life notes become callable after two years at par plus 50% of the coupon.

Proceeds will be used for general corporate purposes.

Previous to the announcement of the Yum! Brands deal on Monday, the most recent issues to clear the high-yield primary market came on March 4.

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