Yum Brands Inc Successfully Concludes Refinancing of Senior Secured Credit Facilities

Yum! Brands, Inc. (NYSE: YUM) made a significant announcement today regarding the refinancing of certain facilities within its KFC, Pizza Hut, and Taco Bell businesses. The subsidiaries overseeing these operations have successfully completed the refinancing of their existing term loan A facility and revolving facility, totaling approximately $713 million, and $1.25 billion respectively.

This refinancing was achieved through the issuance of a $500 million term loan A (the “Term A Loan”) and a $1.50 billion revolving credit facility (the “Revolving Facility”) via an amendment to the underlying credit agreement. The maturity date for both the Term A Loan and the Revolving Facility is set to the earliest of April 26, 2029, or 91 days prior to the maturity of existing term loan B or senior notes, provided that more than $250 million of such loans remain outstanding.

The total size of the bank credit facility, excluding the existing $1.46 billion term loan B, remains at approximately $2.00 billion. Importantly, this transaction does not introduce any additional net new debt to the balance sheet.

Interest rates for the Term A Loan and the Revolving Facility remain unchanged from the existing facilities. These rates are determined based on either Adjusted Term SOFR or the base rate, with a spread determined by the borrowers’ total leverage ratio.

Adjusted Term SOFR rates are calculated based on one, three, or six-month term SOFR plus a specified percentage, while the base rate is determined by factors such as the Prime Rate, federal funds rate, or the one-month Adjusted Term SOFR rate. Additionally, the Term A Loan features an amortization schedule, with 2.5% per annum during the second and third years following closing, and 5.0% per annum during the fourth and fifth years following closing.

Proceeds from the issuance will primarily go towards repaying the existing facilities, covering associated transaction fees and expenses, and supporting general corporate purposes.

Yum! Brands, Inc., headquartered in Louisville, Kentucky, and its subsidiaries oversee a vast network of over 59,000 restaurants across more than 155 countries and territories. Their portfolio includes iconic brands like KFC, Taco Bell, Pizza Hut, and the Habit Burger Grill. Notably, Yum! Brands has received numerous accolades, including recognition on the Dow Jones Sustainability Index North America for eight consecutive years and being listed among TIME Magazine’s Best Companies for Future Leaders and Newsweek’s America’s Most Responsible Companies. In previous years, Yum! Brands has also earned distinctions such as inclusion in the Bloomberg Gender-Equality Index and Forbes’ America’s Best Employers for Diversity, highlighting their commitment to sustainability, diversity, and responsible business practices. Moreover, their flagship brands, KFC, Taco Bell, and Pizza Hut, have consistently ranked among the top franchises globally, as evidenced by their placement in Entrepreneur’s Top Global Franchises Ranking.

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