Jollibee Foods Corp., the largest food service company in the Philippines and one of the biggest in Asia, is raising $600 million from a maiden offshore bond offering.
JFC said in a disclosure to the stock exchange the $600-million, US dollar-denominated guaranteed senior perpetual capital securities would have an initial distribution rate of 3.9 percent in the first five years and be payable semi-annually.
The company plans to use proceeds from the bonds to be issued by wholly-owned unit Jollibee Worldwide Pte. Ltd. to refinance short-term debt spent in the acquisition of The Coffee Bean & Tea Leaf.
“The objective of management for this issuance is to further strengthen the balance sheet of JFC to build a stronger foundation for accelerating its growth in order to achieve its vision to become one of the top 5 restaurant companies in the world,” the company said.
The transaction represents the first-ever bond or perpetual securities issuance of JFC and the first time that it tapped the capital markets since its initial public offering in 1993.
The issue is also one of the first by an Asian restaurant company.
JFC said the transaction was oversubscribed by almost 10 times the original intended issue amount of $400 million, enabling the company to increase the size of the transaction to $600 million and tighten final pricing by 35 basis points to 3.9 percent from the initial price guidance of 4.25 percent.
“This marks the lowest pricing for a 5-year perpetual Securities issued by a Philippine company reflecting the strong demand for a JFC bond and the reputable credit standing of the company,” the fast-food giant said.
The securities are unrated and will be listed on Singapore Exchange Securities Trading Limited.
JFC in September completed the acquisition of a 100 percent stake in CBTL for $350 million (P18.3 billion) on a debt-free basis.
The acquisition was done through Java Ventures LLC, a US-based wholly-owned subsidiary of Super Magnificent Coffee Company Pte. Ltd. (SMCC Singapore).
The payment for the acquisition of CBTL was funded by proceeds from bridge loans entered into by JWPL with several financial institutions.
The acquisition of CBTL brand is JFC’s largest and most multinational to date. It will add 14 percent to JFC’s global system wide sales and 26 percent to total store network, and bring the contribution of the international business to 36 percent of worldwide sales.