Yum! Brands Complete Refinancing Process

Yum! Brands Inc. has announced that certain subsidiaries that operate the Company’s KFC, Pizza Hut and Taco Bell businesses have completed the refinancing of the existing approximately USD 713 million term loan A facility and USD 1.25 billion revolving facility through the issuance of a USD 500 million term loan A and a USD 1.50 billion revolving credit facility pursuant to an amendment to the underlying credit agreement.

The Term A Loan and the Revolving Facility will mature on the earliest of (i) April 26, 2029, (ii) the date that is 91 days prior to the maturity of the borrowers’ existing term loan B if more than USD 250 million of such term loan B remains outstanding as of such date and (iii) the date that is 91 days prior to the maturity of the borrowers’ existing senior notes if more than USD 250 million of such senior notes remains outstanding as of such date. The total size of the bank credit facility (excluding the borrowers’ existing USD 1.46 billion term loan B) remains ~ USD 2.00 billion. The transaction does not add any additional net new debt to the balance sheet.

The interest rates applicable to the Term A Loan and to borrowings under the Revolving Facility have not changed from the Existing Facilities. The interest rates will be based on either Adjusted Term SOFR or the base rate, as determined by the borrowers, plus a spread based on the borrowers’ total leverage ratio.

Adjusted Term SOFR refers to one-month term SOFR plus 0.11448 percent, three-month term SOFR plus 0.26161 percent or six-month term SOFR plus 0.42826 percent, as selected by the borrowers. Such spread based on the borrowers’ total leverage ratio is initially 0.75 percent for Adjusted Term SOFR loans and 0.00 percent for base rate loans and ranges between 0.75 percent and 1.50 percent for Adjusted Term SOFR loans and between 0.00 percent and 0.50 percent for base rate loans based on the total leverage ratio. The “base rate” means the greatest of (a) the Prime Rate then in effect, (b) the federal funds rate then in effect plus 0.5 percent and (c) the rate for one month Adjusted Term SOFR rate then in effect plus 1.0 percent. The Term A Loan will amortise at 2.5 percent per annum during the second and third years following closing and at 5.0 percent per annum during the fourth and fifth years following closing.

Proceeds from the issuance will be used to repay the existing facilities and pay associated transaction fees and expenses, as well as for general Yum! Brands corporate purposes.