JOLLIBEE Foods Corp. (JFC) is looking at tapping the dollar bond market for the issuance of senior perpetual securities, the proceeds of which it will be used to partly pay for its acquisition of Coffee Bean & Tea Leaf (CBTL).
In a disclosure to the stock exchange on Thursday, JFC said its wholly owned subsidiary Jollibee Worldwide Pte. Ltd. (JWPL) has mandated banks to organize the bond issuance.
It has identified Citigroup Global Markets Singapore Pte. Ltd. and J.P. Morgan (S.E.A.) Ltd. as joint global coordinators, and Citigroup, Credit Suisse, J.P. Morgan, and Mizuho Securities as joint lead managers and joint bookrunners for the issuance.
The banks will be arranging a series of fixed income investor meetings in Hong Kong, Singapore and London that will start on Jan. 13. JFC is eyeing a Regulation S offering of dollar-denominated guaranteed senior perpetual capital securities.
A Regulation S offer means the securities are executed in countries outside the United States. It can be used for the issuance of equity or debt securities to raise capital.
“Proceeds from the contemplated offering are intended primarily to refinance the short-term debt from the acquisition of International Coffee and Tea, LLC (The Coffee Bean & Tea Leaf), completed on September 24, 2019, as well as fund initiatives aligned with Issuer’s (JWPL) general corporate purposes,” JFC said.
“The Securities will be accounted for as equity, and will strengthen the balance sheet of the Guarantor (JFC), in line with its policy of prudent financial management,” it added.
The company has not specified as of writing the target amount for the bond offering.
JFC announced last year its acquisition of CBTL for $350 million on a debt-free basis. The deal expands the company’s presence to 27 countries where CBTL has footprint.
The company reported an attributable net income of P4.53 billion in the nine months to September, declining 26% from a year ago, as it absorbed losses in Smashburger and Red Ribbon.
Shares in JFC at the stock exchange fell P3.20 or 1.52% to retreat at P207 apiece on Thursday. — Denise A. Valdez