Yum! Brands, Inc. (NYSE: YUM) today announced the reference yields,
tender offer consideration, and total consideration for two series of
its outstanding debt securities in connection with its previously
announced cash offers to purchase up to $525 million aggregate principal
amount of five series of its outstanding debt securities (collectively,
the “Notes”). As further discussed below, only Notes with Acceptance
Priority Levels 1 and 2, as identified in the table below, will be
accepted for purchase, assuming that the conditions to the tender offers
are satisfied or waived. The terms and conditions of the tender offers
are described in the Offer to Purchase, dated October 22, 2013 (the
“Offer to Purchase”), and the related Letter of Transmittal.
For Notes that were validly tendered and not validly withdrawn at or
prior to 5:00 p.m., New York City time, on November 4, 2013 (the “Early
Tender Time”) and that are accepted for purchase, the applicable total
consideration per $1,000 principal amount of each series of Notes (for
each series, the “Total Consideration”) is the price determined as
described in the Offer to Purchase intended to result in a yield to
maturity (calculated in accordance with standard market practice) equal
to the sum of (i) the yield to maturity for the applicable U.S. Treasury
Reference Security specified in the table below, calculated based on the
bid-side price of such U.S. Treasury Reference Security as of 2:00 p.m.,
New York City time, today, November 5, 2013 (being the first business
day following the Early Tender Time), plus (ii) the applicable Fixed
Spread specified in the table below. The Total Consideration includes
the Early Tender Payment specified in the table below. Holders tendering
their Notes after the Early Tender Time and at or prior to 11:59 p.m.
New York City time on November 19, 2013 (the “Expiration Time”), will be
eligible to receive only the applicable Tender Offer Consideration,
namely the applicable Total Consideration less the Early Tender Payment
specified in the table below.
Title of
Security
(CUSIP
Number)
|
|
|
Principal
Amount
Outstanding
|
|
|
Tender
Sub-Cap
|
|
|
Acceptance
Priority
Level
|
|
|
Fixed
Spread
(basis
points)
|
|
|
U.S.
Treasury
Reference
Security
|
|
|
Bloomberg
Reference
Page
|
|
|
Early
Tender
Payment
|
|
|
Total
Consideration
|
|
|
Tender
Offer
Consideration
|
6.875% Senior Notes due 2037 (988498 AD3)
|
|
|
$600,000,000
|
|
|
$275,000,000
|
|
|
1
|
|
|
165
|
|
|
2.875% U.S. Treasury Note due 05/15/2043
|
|
|
PX1
|
|
|
$50
|
|
|
$1,191.43
|
|
|
$1,141.43
|
6.250% Senior Notes due 2018 (988498 AC5)
|
|
|
$600,000,000
|
|
|
N/A
|
|
|
2
|
|
|
40
|
|
|
1.375% U.S. Treasury Note due 09/30/2018
|
|
|
PX1
|
|
|
$50
|
|
|
$1,185.94
|
|
|
$1,135.94
|
|
In addition, holders whose Notes are accepted for purchase pursuant to
the tender offers will receive accrued and unpaid interest on their
purchased Notes from and including the last interest payment date for
such Notes to, but excluding, the Settlement Date (as defined in the
Offer to Purchase). Subject to the terms and conditions of the tender
offer, the Settlement Date will follow promptly after the Expiration
Time and currently is expected to be November 20, 2013.
Earlier today, Yum! Brands also announced that it has increased the
combined aggregate principal amount of the Notes that it is offering to
purchase in the tender offers from $525 million to $550 million (as
increased, the “Tender Cap”). Additionally, the Tender Sub-Cap for Yum!
Brands’ offer to purchase its 6.875% Senior Notes due 2037 is being
increased from $250 million to $275 million. Except for such increases,
all other terms and conditions of the tender offers, as previously
announced, remain unchanged.
Yum! Brands previously announced that the total aggregate principal
amount of Notes of all five series validly tendered and not validly
withdrawn at or prior to the Early Tender Time was $1,055,897,000, which
amount exceeds the Tender Cap. Since Yum! Brands will accept for payment
only such portion of the tendered Notes that does not result in it
purchasing Notes with an aggregate principal amount above the Tender Cap
and, in the case of the Notes with Acceptance Priority Level 1, above
the Tender Sub-Cap, Yum! Brands will purchase a portion of the validly
tendered Notes with Acceptance Priority Levels 1 and 2 and will not
purchase any Notes with Acceptance Priority Levels 3, 4, or 5, in
accordance with the terms of the tender offers set forth in the Offer to
Purchase. Assuming that the conditions to the tender offers are
satisfied or waived, tendered Notes with Acceptance Priority Levels 1
and 2 will be accepted for purchase on a pro rata basis as described in
the Offer to Purchase, such that the aggregate principal amount of the
Notes accepted in the tender offers equals the Tender Cap. Yum! Brands
has directed D.F. King & Co., Inc., the Tender Agent for the tender
offers, to promptly return to holders all Notes having Acceptance
Priority Levels 3, 4, and 5, namely the 6.250% Senior Notes due 2016,
the 5.300% Senior Notes due 2019, and the 4.250% Senior Notes due 2015
that were tendered. All 6.875% Senior Notes due 2037 and 6.250% Senior
Notes due 2018 tendered and not accepted for purchase will be returned
to holders following the Settlement Date in accordance with the terms of
the tender offers.
On October 31, 2013, Yum! Brands completed an underwritten public
offering of senior unsecured notes in an aggregate principal amount,
together with other available funds, sufficient to satisfy the financing
condition described in the Offer to Purchase. The tender offers are
subject to the satisfaction or waiver of certain other conditions, as
specified in the Offer to Purchase.
Yum! Brands has retained Goldman, Sachs & Co. and J.P. Morgan Securities
LLC to serve as the Lead Dealer Managers for these tender offers.
Goldman, Sachs & Co. may be contacted at (800) 828-3182 (toll free) or
(212) 357-0215 (collect) and J.P. Morgan Securities LLC may be contacted
at (866) 834-4666 (toll free) or (212) 834-4811 (collect). Yum! Brands
has also retained D.F. King & Co., Inc. to serve as the Tender Agent and
the Information Agent for the tender offers.
This press release is not an offer to purchase or a solicitation of
acceptance of a tender offer, which may be made only pursuant to the
terms of the Offer to Purchase and the Letter of Transmittal. The tender
offers do not constitute an offer to purchase Notes in any jurisdiction
in which, or to or from any person to or from whom, it is unlawful to
make such offer or solicitation under applicable securities or blue sky
laws. None of Yum! Brands, the Tender Agent, the Information Agent, any
of the Dealer Managers or the trustee for the Notes is making any
recommendation as to whether holders should tender Notes in the tender
offers.
About Yum! Brands
Yum! Brands, Inc., based in Louisville, Kentucky, has over 40,000
restaurants in more than 130 countries and territories. Yum! Brands is
ranked #201 on the Fortune 500 List with revenues of over $13 billion in
2012 and in 2013 was named among the top 100 Corporate Citizens by
Corporate Responsibility Magazine. The Company's restaurant brands -
KFC, Pizza Hut and Taco Bell - are the global leaders of the chicken,
pizza and Mexican-style food categories. Outside the United States, the
Yum! Brands system opened on average over five new restaurants per day
in 2012, making it a leader in international retail development.
Copyright Business Wire 2013