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Yum! announces pricing of notes offering

June 3, 2016

Yum! Brands Inc announced that certain subsidiaries operating KFC, Pizza Hut and Taco Bell restaurants have agreed to issue and sell $1.05 billion aggregate principal amount of 5 percent senior notes, due in 2024, and $1.05 billion aggregate principal amount of 5.25 percent senior notes, due in 2026. Senior notes are debt securities or bonds with precedence over unsecured notes. They must be repaid even in bankruptcy which makes them relatively secure.

The aggregate principal amount of notes being issued was decreased from $2.3 billion to $2.1 billion. This occurred because the aggregate principal amount of the company's new senior secured credit facilities is increasing from $2.3 billion to $2.5 billion. 

The company and its domestic subsidiaries will guarantee notes on a senior unsecured basis. Net proceeds from the offering, along with proceeds from the new senior secured credit facilities, will be used for:

• Funding a return of capital to shareholders.
• Repaying borrowings under the existing revolving credit facility.
• Paying associated transaction fees and expenses.
• General corporate purposes.

The closing is scheduled for June 16.