JOLLIBEE Foods Corp. (JFC) raised $600 million from a landmark sale of perpetual securities in its offshore capital market debut, restocking its chest after buying the company behind US specialty chain Coffee Bean & Tea Leaf (CBTL).
It was the first time for the Philippine fast-food giant to issue perpetual bonds and the first time to tap offshore capital markets since it was listed in 1993. “This issuance is one of the first by an Asian restaurant company,” it said in a stock exchange filing on Friday.
The transaction was oversubscribed by almost 10 times the original issue amount of $400 million, allowing the company to increase the transaction to $600 million and tighten final pricing by 35 basis points to 3.9%, Jollibee said.
It added that the issuance marks the lowest pricing for a five-year perpetual bond issued by a Philippine company, “reflecting the strong demand for a JFC bond and the reputable credit standing of the company.”
The company said it would use the proceeds of the bond sale for general corporate purposes and to repay short-term debt after it bought International Coffee and Tea, LLC, the company behind The Coffee Bean & Tea Leaf.
The securities will be accounted for as equity.
The Regulation S dollar-denominated issuance will have an initial distribution rate of 3.9%, non-callable for five years, and payable semi-annually. “Reg S” securities are available only for offers and sales outside the US.
Jollibee unit Jollibee Worldwide Pte. Ltd. will issue the securities, which are unrated and will be listed on the Singapore Exchange Securities Trading Ltd.
“The objective of management for this issuance is to further strengthen the balance sheet of JFC to build a stronger foundation for accelerating its growth in order to achieve its vision to become one of the top five restaurant companies in the world,” the company said.
Jollibee shares closed 6.27% or P12.60 higher at P213.60 each on Friday. — Victor V. Saulon