Jollibee Foods Corp. raised $600 million from its first sale of perpetual securities in offshore markets, replenishing its balance sheet after buying the company behind the American chain Coffee Bean & Tea Leaf.
The Philippine fast-food giant said the deal drew nearly 10 times the $400 million it had planned to raise, which let it lift the size to $600 million and bring the rate down to 3.9%, a cut of 35 basis points. It marked the lowest rate a Philippine company has paid for a five-year perpetual bond, and the first time Jollibee had issued perpetual bonds or tapped offshore capital markets since its 1993 listing.
The securities are dollar-denominated, non-callable for five years and pay interest twice a year. They will be accounted for as equity, are unrated, and will list on the Singapore Exchange through a Jollibee unit. The notes were sold under Regulation S, a format restricted to offers and sales outside the United States. The company said the money would go toward general corporate purposes and paying down short-term debt taken on for the Coffee Bean & Tea Leaf purchase.
The stated objective is expansion. Management framed the issue as a way to strengthen the balance sheet so the company can build a stronger foundation for growth, part of its ambition to become one of the five largest restaurant companies in the world.
Investors welcomed the news. Jollibee shares closed 6.27% higher, up P12.60 to P213.60, on Friday.
Sources
- Jollibee raises $600M from offshore debut – BusinessWorld Online
- Jollibee raises $600 million from first ever bond sale | ABS-CBN News
