LOUISVILLE, Ky. – In a bid to return capital to shareholders, Yum! Brands Inc. said it is offering $4.6 billion of new debt. The company set a target of returning approximately $6.2 billion of capital to shareholders ahead of the spinoff of its China business.
“The new debt is intended to fund the return of capital to shareholders, repay borrowings under the company’s existing revolving credit facility, pay associated transaction fees and expenses, and support general corporate purposes,” the company said in a statement. “This debt will be issued by certain subsidiaries that operate the Company’s KFC, Pizza Hut and Taco Bell businesses.”
The new debt will be comprised of a new senior secured credit facility, which will include an $800 million term loan A and a $1.5 billion term loan B; in addition to $2.3 billion of senior unsecured notes. Additionally, a $1 billion revolving credit facility will replace the Yum! Brands’ existing revolving credit facility. The company’s legacy publicly traded notes will remain in place as unsecured obligations of the company.
