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S&P rates Yum! Brands notes BB-
S&P said it gave its BB- issue-level rating and 5 recovery rating to Yum! Brands Inc.'s proposed new $1.05 billion of senior unsecured notes due 2032. The 5 recovery rating indicates an estimate for modest recovery to lenders (10%-30%; rounded estimate: 10%) in default.
The company will use the proceeds and about $40 million of cash on hand to redeem the $1.05 billion of 5¼% senior unsecured notes due 2026 issued by Yum's subsidiaries (KFC Holding Co., Pizza Hut Holdings LLC, and Taco Bell of America LLC) and pay related premiums, fees and expenses.
“The redemption of these notes, which rank ahead of the parent notes, will reduce the amount of subsidiary notes outstanding to $750 million. As a result, we revised our recovery rating on Yum's existing senior unsecured debt to 5 from 6 because of the elimination of $1.05 billion in senior claims,and issue-level ratings were raised to BB-from B+. The ratings on Yum!'s operating subsidiaries' debt, including the senior secured credit facilities and unsecured notes, are unchanged,” S&P said in a press release.
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