Yum! Brands to sell $2.3 billion senior notes in effort to optimize its capital structure

Portland, Ore., May 18 – Yum! Brands, Inc. announced in a Wednesday press release that it plans to sell $2.3 billion of senior notes.

The notes are part of an overall $4.6 billion of new debt that the Louisville company plans to use to optimize its capital structure in advance of the planned separation of its China business.

The financing will also include $2.3 billion of new bank debt. A bank meeting is scheduled to take place in New York on Monday.

The financing is yet another milestone in the company’s previously communicated plan of targeting total companywide leverage of approximately 5.0-times EBITDA and returning about $6.2 billion of capital to shareholders prior to the separation of its China business, which is on track to be completed by the end of 2016, the company stated in the release.

The new debt is intended to fund the return of capital to shareholders, repay borrowings under the existing revolver and support general corporate purposes. This debt will be issued by certain subsidiaries that operate the company’s KFC, Pizza Hut and Taco Bell businesses.

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