International ratings service Fitch Ratings has assigned a ‘BB+’ rating to YUM! Brands’s (formerly TRICON Global Restaurants) proposed US$350m senior unsecured notes offering maturing in 2012.
Go deeper with GlobalData
The company’s bank facilities and senior notes are affirmed at ‘BB+’. The rating outlook remains Stable.
YUM! Brands intends to apply the proceeds from the offering along with an additional draw under a new unsecured revolver to repay and retire the existing senior unsecured term loan facility that had a principal balance of US$422m as of 23 March 2002. YUM! Brands has received commitments to refinance its US$1.75bn unsecured revolver with a US$1.25bn three year revolver.
YUM! Brands’ ratings consider the company’s solid cash-generating ability, the diversity and size of its core brands, leading position in each of its restaurant food categories, and ability to realise efficiencies through national advertising, bulk purchasing and multibranding. These strengths are balanced against the competitive nature of the Quick Service Restaurant industry and the company’s leveraged capital structure.
After the end of last quarter, YUM! Brands acquired Yorkshire Global Restaurants, owner of Long John Silver’s and A&W All-American Food Restaurants (A&W), for US$320m, including assumed debt. The acquisition will result in higher leverage than had been originally anticipated, but will also create additional growth through more multibranding opportunities.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataYUM! Brands’ other core brands, KFC, Taco Bell and Pizza Hut, have been generating better revenue growth recently with same-store sales at US company-owned restaurants up 3% for the Q2 ended 15 June 2002, not including Long John Silver’s and A&W restaurants. International system sales increased 7%, after a negative impact from foreign currency conversion.
