Published on 3/24/2022 in the Prospect News High Yield Daily.
New Issue: Yum! Brands prices upsized $1 billion 10-year senior notes at par to yield 5 3/8%
By Paul A. Harris
Portland, Ore., March 24 – Yum! Brands, Inc. doubled the size of its notes offering to $1 billion from $500 million and priced the issue of 10-year senior notes (Ba3/BB) at par to yield 5 3/8% in a Thursday drive-by, according to market sources.
The yield printed at the tight end of yield talk in the 5½% area. Initial guidance was in the mid-to-high 5% area.
The deal was playing to a $2 billion order book, according to a sellside source, who added that the new Yum! 5 3/8% notes broke to par bid, par ½ offered late Thursday afternoon.
BofA Securities Inc. was on the left of a syndicate of dealrunners that also included Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Wells Fargo Securities LLC and Fifth Third Securities Inc.
The Louisville, Ky.-based restaurant company plans to use the proceeds to redeem and retire its 7¾% senior notes due 2025 and for general corporate purposes.
Yum! operates KFC, Taco Bell, Pizza Hut and The Habit Burger Grill.
| Issuer: | Yum! Brands, Inc.
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| Amount: | $1 billion, increased from $500 million
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| Issue: | Senior notes
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| Maturity: | April 1, 2032
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| Bookrunners: | BofA Securities Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Wells Fargo Securities LLC and Fifth Third Securities Inc.
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| Senior co-managers: | Barclays, Capital One Securities Inc., ING Financial Markets LLC and MUFG
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| Co-managers: | BNP Paribas Securities Corp., HSBC Securities (USA) Inc., Huntington Investment Co., ICBC Standard Bank plc, PNC Capital Markets LLC, Rabo Securities USA Inc., Scotia Capital (USA) Inc., U.S. Bancorp Investments Inc. and Siebert Williams Shank & Co. LLC
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| Trustee: | U.S. Bank Trust Co., NA
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| Counsel to issuer: | Mayer Brown LLP
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| Counsel to underwriters: | Davis Polk & Wardwell LLP
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| Coupon: | 5 3/8%
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| Price: | Par
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| Yield: | 5 3/8%
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| Spread: | 303 bps
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| Call: | Beginning April 1, 2027 at 102.688, beginning April 1, 2028 at 101.792; beginning April 1, 2029 at 100.896; beginning April 1, 2030 at par
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| Make-whole call: | 50 bps over Treasuries make-whole premium
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| Change-of-control: | 101
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| Trade date: | March 24
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| Settlement date: | April 1
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| Ratings: | Moody's: Ba3
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| S&P: BB
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| Distribution: | SEC registered
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| Price talk: | 5½% area
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| Marketing: | Drive-by
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| Cusip: | 988498AR2
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